How is the lifetime economy changing the financial industry?

Global demographic trends show a major change in the structure of society – people over 60 are living longer and are more actively involved in society than in previous generations.

These changes lead to growth in the lifetime economy, as older people become an integral part of society not only as consumers, but also as active market participants workers, entrepreneurs and volunteers. Is the financial sector adapting enough to the needs of older people and providing access to financial services?

The latest data from the World Health Organization confirms that every country in the world is experiencing an increase in both the number and the proportion of elderly people. By 2050, the number of people aged 60 and over is expected to double to nearly 2.1 billion worldwide. Likewise, the Office of Central Statistics reports that Latvian residents live an average of 5 years longer than in 1991. Therefore, with the growing number of elderly people, financial issues increasingly important.

Seniors: reliable borrowers with stable income

Although people have historically been encouraged to eliminate debt before retirement or as early as possible, financial professionals have changed that position over the past few decades. An increasing number of households with people over 55 are in debt, according to data from the Employee Benefits Research Institute (EBRI). And this trend does not have a negative effect – older people use more loans for unexpected expenses and to improve the quality of life, thus maintaining an active role in society.

Therefore, it must be noted that the longevity economy is also forcing the financial industry to review whether the elderly have access to financial services, especially in cases of emergency, thus ensure the financial well-being of the elderly. The biggest stereotype is to believe that elderly people will not be able to fulfill their responsibilities, but DelfinGroup‘s experience shows the opposite.

Why are elderly people reliable partners for money transactions? The answer is that they have a stable income and a high sense of responsibility. Decisions are driven by pragmatic and rational necessity. From our experience, loans are mostly used to finance unplanned expenses, such as buying household appliances, home repairs, etc. Economic experts from the University of Massachusetts also emphasize that the elderly are the most financially secure section of society. Meanwhile, data from the US Federal Reserve’s Survey of Household Economics and Decisions (SHED) shows that only 58% of 25- to 34-year-olds can afford an unexpected $400 expense. In turn, this indicator reaches 77% of people aged 65 to 74 and 82% of people over 75 years old. Therefore, older people have higher financial security than younger age groups, which strengthens their position as reliable borrowers.

Financial independence of the elderly and an active role in society

It is clear that by providing access to the necessary financial resources, seniors can address a variety of needs while maintaining their independence. It promotes their active participation in the economy and in public life, helping to ensure a healthier and more fulfilling daily life. For example, loans are used to cover health improvement costs, home repairs, or to improve living conditions that allow them to maintain the comfort and safety of their home. DelfinGroup provides a consumer loan service for people up to 85 years of age, and also provides a shop loan service with no age limit. This allows us to financially include the residents of Latvia, regardless of their age or income level.

When analyzing the needs of the elderly, it should be recognized that, although this generation is active in the digital environment, face-to-face communication is one of the success factors for their economic inclusion. In order for service providers to be part of the lifetime economy, it is necessary to rethink the ways in which older people receive daily support and communication. This is one of the reasons why, contrary to other people’s decisions to close face-to-face branches in Latvia, the Bank Notes network we manage still has more than 90 stores throughout the country.

Older people are the most knowledgeable part of society, characterized by a high sense of responsibility, punctuality and stable income. With the increasing number of elderly people, it is clear that they are becoming a vital part of the economic and social fabric. Therefore, it is necessary for the financial industry to adapt to these changes to ensure that the elderly can not only live, but also live fully and independently.