Older, wiser - and a better insurance risk

Two new savings accounts have recently launched for the older market. This is interesting not just for the rates that the new Portman and Stroud & Swindon accounts are offering, but because they show just how interested financial institutions are in this sector.

The home insurance market shows a similar, continued level of interest by financial institutions - not surprising, perhaps, as the over-fifties own so much of the nation's wealth and are also relatively good risks.

So let us get down to the nitty-gritty. How worthwhile are the new accounts? The Portman's 50+ savings account is offering 5 per cent gross at 75 days' notice on minimum deposits of £2,500. And Stroud & Swindon's Diamond account (for those 60-plus if you hadn't guessed) offers 4.85 per cent, instant access, on £5,000 deposits.

Overall, these accounts are 'quite competitive', says Jane Cane of financial data provider MoneyFacts. But she does add that 'there are better accounts out there'. There is the AA's Telephone Bonus Savings Issue 1 account, for example, paying 5.25 per cent on deposits of £1 or above.

The common factor with all of these three variable-rate accounts is that they include introductory bonuses which will be reduced after an initial period of between nine and 12 months. So - as many savers already know - if you go for the top eye-catching rates, do keep watching them, as the rates could decline after a period.

And what is happening in the buildings and contents insurance market? Insurance brokerage website insuresupermarket.com shows that for a 58-year old married man living in a £250,000 house at a Bristol postcode with contents cover of £35,000, quotes ranged between £149.58 and £243.30 - proving that the cliche 'shop around' is quite correct.

Budget was cheapest (£149.58); RIAS (specialist 50+ insurance brokers) was 6th (£173.62); Saga was 8th (£175.99); Help the Aged was 16th (£212.10); Age Concern was 17th (£219.31); and Abbey was 19th and bottom (£243.30).

There is a lot of variation here - the most expensive provider charging nearly 50 per cent more than the cheapest. (It has to be said, however, that price is not the only issue in insurance: some of the costlier insurers may be providing better benefits than the cheaper ones.)

Hein Kuiper of RIAS says that within five years 'we would expect premiums to come down' for this age group - and particularly for those who are retired (and can represent a lower risk as they are at home more and have paid off the mortgage).

'Insurers need to build up the claims records over the years,' he says, explaining that insurers have tended to levy premiums on the basis of postcode but that they might start factoring in age more often.

Who needs teaching a lesson?

I have recently come back from a (marvellous) Ramblers holiday in Sicily - in the most enjoyable company of a group of teachers, as it was half-term week. Pensions worried them - not for themselves so much as for their children. These highly educated, questioning people did not know how worthwhile it was for their children to save, even though they had built up decent pensions themselves.

Pushed in the bar to talk about pensions, I quoted a figure from Mercer Human Resource Consulting that Cash has published before: twenty-somethings would need to invest £280 a month in their pension for most of their career to be sure the investment was worthwhile. Smaller savings can merely mean you accumulate less in your pension than you would get from the state a few decades down the line. Somehow, even though few of us could do these calculations ourselves, many people know it intuitively.

This is one reason why we need the Pension Commission report, due on 30 November, to prove to government that its basic sums on state pensions do not make sense.