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Better strategies for financial planning communications

Financial distress in old age is becoming an increasingly important problem, affecting over 20 % of European consumers. This is due to such factors such as longer life expectancy, declining public pension funds, and longer periods of unemployment and underemployment.

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An EU-funded project attempted to improve understanding of the effective designs of financial planning communications. The RISK COMMUNICATION (Designing evidence-based communication for elderly consumers in financial distress) project pursued four objectives in order to achieve this. First, project fellows conducted two literature reviews, examining patterns and explanations of over-indebtedness at an older age in Germany, as well as expert interviews in Germany, the Netherlands and the United Kingdom. The interviews included themes such as financial planning, academic research, banking, religious organisations, government services and consumer advocacy. The second objective consisted of 46 mental-model interviews with adults aged between 60 and 85 years old, living in areas with high poverty rates in the three aforementioned countries. Researchers also developed an online survey to test the insights from the expert and consumer interviews from a total of 350 financially distressed adults. Data analysis investigated the relation between financial distress and indicators of physical and physiological well-being. The survey examined three themes: food insecurity, loneliness and depression, and the quality of family support networks. Finally, the project developed protocols as part of the data analysis and discussion. Through the project interviews, the causes and consequences of financial distress at an older age emerged as well as new insights on, among other points, the emotional burdens of debt, the trade-offs in meeting basic needs and the lack of family support. Furthermore, the confirmatory survey examined the association between financial distress in older age and physical, cognitive and social well-being. The research conducted during this project is among the first systematic investigations in the EU of the relation between elderly consumers and the knowledge, belief and experiences with asset decumulation, debt management and financial planning strategies. The study also took a new and innovative approach by applying evidence-based concepts of risk perception and communication research to understand financial decisions of elderly consumers. Furthermore, RISK COMMUNICATION was among the first to research elderly consumers' possible needs for financial advice and their preferences, investigating the role of newly introduced government advisory services. Lastly, the study systematically developed protocols to design evidence-based risk communications, targeting the financial management risks of elderly consumers in financial distress.


Financial planning, financial distress, RISK COMMUNICATION, elderly consumers, debt

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