Ageing and financial inclusion

Most people in low and middle income countries rely on multiple income sources in older age including pensions, employment, small businesses, assets, savings, and financial support from family and friends. Often these income sources are irregular and unreliable.

Many older people in low and middle income countries rely on multiple income sources in older age, including small businesses

(c) HelpAge International

Many older people in low and middle income countries rely on multiple income sources in older age, including small businesses.

Sustainable pension systems linked with financial services can support older people to have a more predictable and adequate income. Yet in low and middle income countries only one in four people over 65 receive a pension.

Many older people do not have access to a bank account where they can safely store cash, and face difficulty accessing credit from financial institutions due to blanket age caps.

The difference we're determined to make

HelpAge’s work on financial inclusion is closely associated with our work on social protection and livelihoods.

We are working to:

  • Improve data collection on income security in older age to provide better evidence for informing policy and practice
  • Ensure governments prioritise the extension of social pensions to close the pensions coverage gap as quickly as possible, guaranteeing a minimum income in older age
  • Remove disincentives to saving for older age by avoiding "cliffs" in pension system design
  • Eliminate or raise age caps
  • Empower older people to use digital banking channels such as mobile money accounts

Examples of our impact so far

  • HelpAge contributed to the extension of social pension schemes to 9 million older people during the period 2007/8 to 2012/13.
  • Our collaboration with the Centre for Financial Inclusion at Accion and the MetLife Foundation has provided evidence on financial exclusion in older age and raised awareness of this issue amongst governments, financial service providers, academics and practitioners.
  • We are exploring opportunities to develop pilots linking social pensions and other financial services products involving collaborations between government institutions and the private sector.

Striking facts

  • In Latin America and the Caribbean, and Asia and the Pacific, only half of older people have access to a pension. In Africa pension coverage is as low as 21%. (ILO, 2014)

  • The average gap between credit age caps and life expectancy is 15 years, meaning that many people live for well over a decade without being able to access credit.

  • In low and middle income countries less than 50% of older people have an account at a formal financial institution.

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