As we come out of lockdown, many will remain vulnerable

One year on since the first UK lockdown, Phoenix Group unveils the extent and nature of vulnerability among its customers during the pandemic, and outlines some of the measures the long term savings and retirement specialist has been taking to support those facing challenges.

Phoenix wanted to understand the challenges its customers may be facing and undertook research among Phoenix Life and Standard Life Assurance customers to find out more in August 2020. This showed that almost two-thirds (63%) of its customers across the group were displaying one or more characteristics that could signal potential vulnerability. This is considerably higher than the FCA figure of 46% recorded in February 2020 (reported by FCA this year).

Riffat Tufail, Vulnerability Lead at Phoenix Group, said:

“It’s been a year like no other and it’s no surprise that more people are showing signs of vulnerability as a result. The need for support has vastly increased and become much more obvious. It’s brought home the fact that we all have the potential to be vulnerable at one or more points in our lives and vulnerability can impact almost all areas of a customer’s life, each effect reinforcing the other. For some, this may have been the first serious experience they have had of facing financial hardship. We have seen more customers under the age of 55 contacting us to see if they can access their pension pot early, as they have no other financial resources available.

“With light now at the end of the tunnel in terms of the pandemic, we anticipate the challenges that customers face will change in the year ahead. But many people will continue to be in vulnerable positions and as we emerge from lockdown and look to build back better, we will keep listening and being flexible in our approach to ensure the right support is in place.”

Phoenix’s findings:

• Lower financial capability was the most common form of vulnerability (42%).
• A third (33%) of customers had experienced one or more negative life event in the previous six months such as bereavement, job loss or relationship breakdown.
• A fifth (21%) of customers had lower financial resilience.
• One in ten (10%) were found to be suffering from health-related matters that impacted on their day to day activities.

Phoenix has also found that when customers reach out for help, their first port of call is family and friends, followed by their employer and then they may reach out to a specialist e.g. a charity or a financial provider. Often people are seeking help as they feel they don’t understand enough to make financial decisions, and don’t feel confident about managing their money and planning for their future. Irrespective of when or why a customer gets in touch, Phoenix looks to provide empathy and reassurance to support their needs.

Tufail continues:

“Reassuring and supporting customers is very much at the heart of what we do and we never want our interactions to be purely transactional. During the pandemic we quickly implemented a number of initiatives to ensure we continued to understand our customers’ changing needs, and were well placed to provide support. These measures are making a difference.”

“We’ve been using behavioural science to help us have fuller conversations with our customers and have trained more of our colleagues to recognise, respond to and record vulnerability in the right way. Having fuller conversations to encourage disclosure and signposting appropriate experts is vital for any business if it is to ensure that its customer outcomes are not impacted by vulnerability. This led us to launch a new colleague ‘vulnerable customer’ e-learning module with built in behavioural science, to help us to more effectively help our customers who experience vulnerable circumstances

“We’ve created additional resources and services for customers, which include the introduction of webinars for our customers on a range of financial topics to help build greater understanding. The webinar format is very accessible and the take up has been tremendous
– over 9,000 customers have attended one of our webinars since the pandemic started, where they can submit questions throughout and learn more, to help plan their finances.

“Offering a range of communication channels has also become increasingly important during the pandemic. We recently arranged a video call with one of our Standard Life customers whose hearing was impaired, to help them through their retirement journey. During the pandemic, we saw more of our vulnerable customers adopting our digital channels, as well as calling us, so we introduced a COVID support hub which includes content to help customers see answers to some of the questions that people in a similar position are asking.”

One aspect that people may not always think about is how helping customers who are facing complex personal difficulties can have an impact on customer teams.

Michael Reed-Smith, Open Customer Director at Phoenix comments:

“We’re acutely aware of the emotional impact helping customers in challenging, complex situations can have on our customer teams, and this can be particularly acute when there is a high volume and when they are working remotely without colleagues around them. We have prioritised wellbeing throughout our response to Covid and have been working to ensure all our colleagues continue to be supported. We’ve created forums for colleagues to talk about their mental health and resilience levels, and promoted all the different employee assistance we have in place, including our internal network of mental health first aiders.”

“My colleagues should be proud of how they are supporting customers during these challenging times and I’m pleased to see this recognised by the CCA Excellence Awards 2021 where Standard Life Assurance won three awards, including an innovation award for our use of behavioural science to help our customers.

“In many ways, Covid has been the perfect case study for vulnerability and provided a clear imperative, a need to move fast and take action. If any financial organisation wasn’t clear on why they may need a dedicated vulnerability team to lead the way in understanding and supporting vulnerable customers before the pandemic, they should truly see its value now. We will be doing further research later this year as we continue to understand, learn and ensure we provide customers with the most relevant support we can.”

-Ends-

Enquiries

Sarah Muir
Lansons
07837 537937
sarahm@lansons.com

Darragh Leeson
Phoenix Group
07707 270001
darragh_leeson@standardlife.com

Methodology

The annual CCA Excellence Awards recognise excellence in customer service. This year Standard Life Assurance, part of Phoenix Group, won three awards for the work it has been doing to support Standard Life customers.

• Team of the Year - silver winners
• Innovation in Customer Service - winners for behavioural science work
• Outstanding Home Working Program - winners

About Phoenix Group

Phoenix Group is the UK’s largest long-term savings and retirement business with c.14 million customers and £338 billion of assets under administration across both our Heritage and Open businesses.

Our Heritage business, where we are the market-leader, is focused on the safe and efficient management of insurance policies. The Heritage business comprises products that are no longer actively marketed to customers, and where we have stepped in as the custodian of these policies. We have built this business through the consolidation of over 100 legacy insurance brands.

Our Open business comprises products that are actively marketed to new and existing customers and has five separate business units. Our Workplace pensions and Customer Savings & Investments (“CS&I”) units operate under the Standard Life brand and manufacture long-term savings and retirement products to support people saving for their future.

The Retirement Solutions unit within Open includes both vesting annuities and our Bulk Purchase Annuity (“BPA”) business, where we acquire annuities and deliver the financial stability required to secure pensions currently provided by corporates.

The Open business comprises our market leading brand – “SunLife” – which sells a range of financial products specifically for the over 50s market and our European business unit which spans Ireland, Germany and the International Bond segment in the UK and operates under the Standard Life brand.