News Analysis: Help the Aged takes financial risk

The tailoring and targeting will have to be spot-on for the charity's finance brand to prosper, writes Joanna Bowery.

Help the Aged has become the latest charity to try to cash in on the over-50s market with the launch of financial-services brand intune last week. Initially selling home, motor and travel insurance and home equity-release products, it plans to invest £10m in promotion over the first three years.

Cracking the sector is no easy task. Despite pouring £8m into the launch of its Heyday membership scheme, which offers a magazine and discounts on goods and services, and also lobbies government, Age Concern recently had to scale back the service due to a lack of interest. It had hoped to get 500,000 members on board, but after less than a year, in February it slashed its target to 50,000 and folded the operation into the parent organisation.

Intune group managing director Anne Grahamslaw argues that the similarities between Age Concern's scheme and her venture, which has been 18 months in the making, end with their charity origins. 'Heyday was set up as a membership scheme you could join and get discounts, and was more of a lobbying organisation,' she says. Another difference, she adds, is that intune will target a more affluent segment.

Help the Aged has invested £5m in the intune group. The financial-services brand 'has a robust business plan, which forecasts a £15m profit by 2012', according to Grahamslaw. The business will not deliver any income to the charity during the first two to three years because all money made will be reinvested in the business.

One of the major lessons learned from the Heyday flop was that consumers in the over-50s market do not want 'a T-shirt declaring that they bought an over-50s product', says Fiona Hought, managing director of the mature marketing specialist Millennium.

'Older people are no different to other consumers - it's about what products and services match their needs,' agrees Elliot Moss, managing director of Leagas Delaney, which handles the Stannah Stairlifts account.

Probably the best-known financial-services brand in the over-50s market is Saga, which offers products tailored to the age group. Its travel insurance, for example, accepts customers with many pre-existing medical conditions, but does not include cover for pregnancy and has no upper age limit, while its home insurance covers homes left for longer, because older people often leave their properties for more than a month.

Saga head of communications Paul Green says part of the company's success is down to its customer service and use of cross-selling. 'It's like a first date,' he says. 'Once customers have been on a first date they tend to stay and they try other products. Although price is very important, it's the experience that brings them back.'

Observers suggest that Help the Aged's venture runs a risk in approaching the demographic as a homogeneous group, despite their disparate income, education and attitudes.

'I am nervous that intune may offer a one-product-fits-all service,' says David McCann, planning director of financial-services marketing agency TeamSpirit. 'The over-50 market is not an amorphous mass. Its members span more than 40 years, have differing lifestyles and are at different lifestages.'

Moss adds: 'If intune's products are bespoke to the differing needs of its customer base, it will work; if not, it will be just another fad.'

Grahamslaw is confident the market knowledge built up through Help the Aged's work will enable it to succeed. 'It's all about tailoring products. This insistence of the marketing industry to group together the whole demographic as "grey" is frankly insulting,' she adds.

However, McCann calls into question the link with the underwriter - the former Liverpool Victoria, LV=. 'I'm not sure it is a marriage made in heaven,' he says. 'Help the Aged needs to look at how it fits with a profit-led organisation, when, as a charity, it should be looking to deliver charitable products.'

Grahamslaw dismisses this concern. 'LV= is a mutual, so it fits with profits going back to charity and not to further line the pockets of rich venture capitalists, as at Saga,' she argues.

Although industry observers remain unconvinced, intune is confident that its market knowledge will be enough to make it a success in a tricky market. Of course, if something does go wrong, Help the Aged risks damaging its own brand's standing.


- During the next 15 years, the number of 15- to 34-year-olds will remain static but the number of 50- to 74-year-olds will rise by 4m.

- The average net worth of a 60-year-old is seven times greater than that of the average 35-year-old.

- The personal wealth of the UK 50-plus demographic has risen 45.6% over the past five years to exceed £5 trillion. Their personal wealth is now greater than the annual GDP of every nation except the US. This group comprises 34% of the UK population and holds nearly 75% of its wealth. In 25 years it will account for 43% of the population. The 50-plus segment also holds 60% of savings and is responsible for more than 40% of consumer demand.

- There were 20m people aged 50 and over in the UK in 2003. This figure is projected to increase by 36% by 2031, when there will be 27.2m.

- More than half of those aged 50-plus own their home outright.

- Net income for the 50-plus in the UK rose 28% between 1995/96 and 2003/04. The increase was even sharper after deducting housing costs, which rose 38% over the period. The growth was a result of substantial increases in income from occupational pensions and benefits.

Sources:, Abbey, Office for National Statistics, Institute for Social and Economic Research

- 61% of private car sales are made to over-50s

- £205bn is the combined spending power of the over-50s

- 20% of 45- to 60-year-olds own an MP3 player

- 83% of over-45s have a mobile phone.


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