Policy PDF Print E-mail

We have investigated two strands of government policy in detail, with a critical eye.  The first is government policies on "financial capability".  This is the idea that by educating us, the government will create individuals who are capable of organising their lives so that they provide themselves with financial security in retirement.   The second strand is government policies on "equity release".  Most people over 65 own their own houses without a mortgage.  The government thinks that this money should be used by people for a variety of purposes, including for example the provision of social care, and the alleviation of income poverty. 

The project has demonstrated the importance of understanding the ‘black box’ of the household for major current and planned policy developments such as in the fields of financial capability and equity release, as well as raising ethical issues for government and the financial services industry in selling market based solutions to households in contexts where maximisation of welfare of individuals is the goal.  The trajectory of government policy relating to financial well being means that increasingly complex market based solutions to social welfare are adopted, dominant discourses of financial capability support financial services industry agendas and govern citizen behaviour, constructing those who end up with inadequate financial resources as failed consumers, responsible for their lot.  The idea of a ‘household consumer’ that can be educated into making financial decisions in line with current policy agendas fails to understand the dyadic practices of couples, nor the psychological processes at play in maintaining coupledom.  It is difficult to see how these market based solutions can meet the complex needs of older couples, nor deliver a gender neutral system of welfare to meet the needs of the men and women within them. 

Financial Capability: Older people have been largely excluded from the financial capability agenda, yet issues of financial capability are lifelong.  Policies fail to consider how to deliver welfare to all citizens, including within households – there are real complexities of financial planning when decisions are ‘negotiated’ and in complex contexts of disability and care. Financial capability as a policy agenda is used to mask market failures and the difficulties of financial planning for old age in an uncertain and high risk financial world; it acts to deflect attention and analysis away from increasing complexity in personal financial markets, which serves the financial services industry and other powerful actors. 

Equity Release: Decades of government policy engineering home ownership have enabled people to conceive of their home as personal property that is not, and ought not to be, available for programmes conceptualised as programmes for government welfare; home owners successfully resist political interference in the ownership of their homes.  Moreover, home ownership is one of the few sites of ongoing marital conflict over financial issues, even in long marriages among older people.  The cultural, social, generational and partnership context severely limits the extent to which equity release policies (which are aimed mostly at older people) can be successful unless policy makers incorporate understanding of these issues into policy design. 


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