Senior citizens require bolstered financial literacy, says Absa

Absa addresses the unique needs of senior customers.

With only less than 10% of retirees achieving a position of complete financial independence, it is clear that financial literacy is not an option but a necessity not only for the youth, but also for senior citizens.

So says Arrie Rautenbach, Absa Head of Retail Markets.

“Arguably, a solution must include the development of a savings culture among the youth in order to allow our youth the opportunity to enter their adult years on a solid footing. However older South Africans, who have already worked and saved over the course of a lifetime, have different needs”.

These needs, Rautenbach says, include being able to use their life savings for regular expenses such as food, transport or vehicle maintenance, fuel, property levies (i.e. if the property is paid up) and health related costs.

He says: “With an increase in the debt ratio to 76, 3% in the 2^nd quarter from 75,6% in the 1^st quarter, the key challenges currently facing many households relate to over-indebtedness and a lack of a savings culture.”

“For senior citizens, this creates anxiety over financial resources to meet their needs. To safeguard the financial well-being of our nation's senior citizens more needs to be done to educate them about financial resources and to ensure that banking services are available for those with limited incomes,” he adds.

Rautenbach urges senior citizens to develop strong relationships with their financial advisers through retirement.

“Managing your money as a pensioner is no different than managing it when you were working and senior citizens should be encouraged to be practical and take time to examine their financial options.

“As a vast generation of the population begins to retire, the need for enhanced financial literacy increases,” emphasizes Rautenbach. He explains how Absa has delivered financial literacy training to several of its former employees in retirement and existing senior customers who account for approximately 60% of Absa’s Retail Bank deposit book.

In a series of road shows and breakfast sessions held this month, Absa educated senior customers on the products best suited to their needs to increase financial literacy levels amongst senior citizens.

“Absa is extremely conscience of the needs of our senior citizens,” he said. The group already provides free basic banking to clients “provided they retain certain balances.”

He cites the Absa Prosperity Account as a perfect product for seniors earning R2 000 a month. “Not only does it give great banking benefits, but also offers access to exclusive lifestyle benefits and other added benefits to take advantage of.”