Fantastic Finance For The Over 50s

Do older Fools face discrimination? Christina Jordan shows over-50s how to get a good deal.

Today sees the publication of Harriet Harman's Equalities Bill with proposals designed to stamp out discrimination in all its forms, including on the basis of age.

The bill looks at all types of age discrimination from healthcare provision to ageism in the workplace. But it also focuses on the role of financial services and the higher premiums charged to older customers, particularly in the insurance arena, as well as the denial of other financial products to those over a certain age.

Finances beyond the age of 50 do require a different approach. But how different?

Should you look for products specifically targeted at older consumers, and do you need to be wary of age discrimination when it comes to purchasing financial products?

Unfair to grey hair?

Once you pass 50 there will inevitably be some types of financial products that increase in cost.

Health insurance in particular shoots up as you get older, on the basis that you are much more likely to get ill. A quick quote test for Norwich Union's private health insurance, changing only the date of birth, showed the following results.

Of course, the rate increases with age, which is understandable assuming that the premiums are based on actuarial statistics about health and likelihood of illness. This is one area the Equalities Bill is expected to look at.

Travel insurance is another area where older people have difficulty getting reasonably priced cover, and for the same reason -- it is more likely they will get ill on holiday that younger travellers. According to Help the Aged 95% of travel insurance policies impose an upper age limit, and it is not uncommon for travellers in their seventies to find that their insurance premiums are more expensive than their holiday - especially if they are travelling outside of Europe.

Older drivers face similar problems when it comes to renewing their car insurance. Similarly, life insurance will usually be more expensive at 50.

In the lending arena some providers impose age restrictions, but it differs between firms. Most mortgage lenders for example, offer homeloans up to retirement age and some will lend up to age 80. But there is usually a cut-off point, based on the risk that the borrower will not live long enough to repay the entire debt.

Targeting the pensioner pound

On the flip side there is a whole range of financial products designed to target the older generation, some of which attempt to fill the gaps left by mainstream providers and others which look to tap into the wealth of silver savers.

For those over 50s who want health, travel or motor insurance, Saga, Rias and Age Concern all offer a range of products specifically targeted at older people. Age Concern has no upper age limit on its travel insurance or motor insurance, and Rias claims over 50s can save between £96 and £195 a year on its car insurance compared to other providers.

Specialist insurance companies are essential if you are simply unable to get cover elsewhere, but be warned, they may not always be cheaper. It is essential that you shop around the mainstream market for insurance cover as well as focusing on those providers that cater for older customers.

Also remember, it's not just about the cost. The cheapest is not always the best when it comes to insurance policies - so check the level of cover too.

In the savings arena, companies are eager to get hold of the pensioner pound and have begun to specifically target the lucrative older market on current accounts and savings accounts.

Alliance & Leicester's Premier 50 Account offers a rate of 8.5% on its current account and provides free worldwide annual multi-trip travel insurance up to age 79, limited private healthcare and other benefits. The account costs £10 a month.

But the bank's standard Premier Direct current account pays the same rate of interest without the charge -- better for those who do not need travel cover and the other benefits.

Coventry's 50plus eSave account pays a fixed rate of 6.25% for the first year -- competitive but not market-leading when it comes to internet accounts. For example, Bradford & Bingley has an easy-access account paying 6.51%.

The bigger picture

Dealing with your day-to-day finances requires the same consideration at 50 and beyond as at any age -- research your products and shop around.

What is different is that you need to focus on other areas. Is your pension on track to fund your retirement? If you are not sure Age Concern can help you work it out with its Money Trail CD.

If not, you might want to consider downsizing or taking an equity release plan.

You may also decide to move your investments into lower risk bonds or cash as you approach retirement, and you should definitely write a will and consider your inheritance tax position- even at 50!

Many people enjoy their highest levels of wealth in their fifties and are financially savvy. By making solid plans about your future finances you can keep it that way on retirement and beyond.

More:Are Over-50s Life Policies A Good Deal?