Have this week's events brought good news or bad for older
people?
By Rebecca Law, Media and PR Officer
This was a very bad week for HSBC. The bank was
fined a record £10.3m after the HSBC-owned care fees advisor, the
Nursing Homes Fees Agency (NHFA), was found to have sold
inappropriate investment bonds to thousands of pensioners. The bank
has also been ordered to pay £29.3 million compensation to those
who have been affected by the mis-selling.
The NHFA provided financial advice to people who were typically
entering long-term care and who were unlikely to live to see their
bonds, which had a lifetime of five years, mature. At the start of
the week, the Financial Services Authority (FSA) said that of a
sample of NHFA customer files, unsuitable sales has been made to
87%.
In attempt to abate the justifiable outcry this has caused, the
bank's final bill looks set, in fact, to be much higher as it has
agreed to take responsibility for all NHFA customers - including
those predating 2005, when it bought the company.
By coincidence this week we came across an IPPR report from 2005
which reported an FSA mystery shopping exercise into financial
advice on equity release for older people. It found that 70% of
advisers failed to gather enough information about the customer to
advise on the suitability of equity release. 4 in 5 advisers did
not ask about health/life expectancy or about eligibility for
benefits, while two thirds failed to ask about other savings and
investments or about future life plans. Yet 64% of advisers
nonetheless said the customer would be suitable for equity release.
This suggests it may have been not just a bad week but a
bad decade for older people seeking financial
advice - further evidence, if it were necessary, of the need for a
clear information and advice strategy to support reform of social
care funding.
On a lighter note, we were thrilled to read about 84-year-old
Moira Starkey from Storridge, near Herefordshire, who has had a
good week after being chosen to carry the Olympic
torch in the countdown to the 2012 London Games. The pensioner was
selected following her impressive fundraising efforts, which
included completing her first marathon by walking around her local
village hall 1,876 times with the aid of two walking sticks. Moira,
who has had a number of operations on her legs, including a knee
replacement, took nearly four months to complete the marathon by
walking a quarter of a mile a week. She says, in an article in
today's Daily Express,"It took me two minutes to do each
lap and I stopped after three or four for a rest, and sometimes a
cup of tea and carried on."
