Context

Older people can become dependent on others to help them manage their finances owing to lower financial capability levels, financial exclusion and reduced cognitive functioning. Financial abuse is the second most prevalent type of elder abuse in the UK, but lacks empirical evidence.

The study

Help the Aged commissioned the study in 2007 in response to their earlier research which raised concerns about the vulnerability of older people to financial abuse and exclusion from financial services. The study reviews literature from the UK and other countries, including the US. More than 1,000 items of literature were sourced from journals, databases and websites, and scanned and rated for relevance.

The aims of the review were to: explore the prevalence and nature of elder financial abuse and the characteristics of the abusers; and identify policy and practice lessons and recommendations, including the role of financial education and financial services in reducing the risk of abuse. The review also considered how better evidence could be collected.

Key findings

The study identifies the lack of a legal or universally accepted definition of ‘financial abuse.’ The term includes a disparate range of acts which inadvertently or deliberately exploit individuals financially, including theft, the misappropriation of money and property, the misuse of assets and powers of attorney, and undue influence on finance and spending decisions.

The review found that:

• An estimated 1.2% of older people (ages 66 and over) had recently been financially abused by someone they knew. Although financial abuse is nearly twice as common as psychological or physical abuse and often occurs in combination with other forms of abuse, this figure is likely to be an underestimate.
• The most vulnerable older people are those living alone, receiving services, in poor health, the elderly, and divorced and separated older women. Most financial abuse takes place at home, and is carried out by a family member, often an adult child. A minority of financial abuse takes place in residential care. Financial abuse may become more commonplace owing to demographic change, government policy such as direct payments, and increased opportunities for financial crime from new technology.
• Demographic change, including people living longer has heightened policy interest in financial abuse resulting in legislation to help protect older people from financial and material abuse. Health and social care practitioners and organisations are also engaging with the issue.
• Indicators of financial abuse include unusually signed cheques and sudden loss of household or personal goods However, it can be complex to prove financial abuse has taken place.
• The review emphasises the effectiveness of preventative approaches. However, finding the balance between protecting older people from harm and e maintaining older people’s autonomy is complex.
• A particular research gap relates to elder financial abuse amongst black and minority ethnic groups.

Recommendations

The review highlights a need for wide-ranging research into financial abuse experienced by older people. The report identifies the following policy and practice recommendations:

• A need for better national multi-agency working, including a financial abuse taskforce which Help the Aged proposes to set up.
• A new and more proactive legal framework, enforceable across financial services and public service organisations, including a mandate for inter-agency cooperation.
• New services and information systems which better reflect what older people find useful.
• Specific training for all relevant staff involved in investigating financial abuse claims.
• Appropriate training for all relevant professionals (e.g. social care) to recognise financial abuse and implement methods to manage routine financial transactions, reducing the scope or motivation for abuse.
• Adequate education to reduce individuals’ risk of financial abuse.
• A role for the Financial Services Authority to publish plans for the prevention of financial abuse.
• Involving older people in local (community) decision-making and people of all ages registering a lasting power of attorney.