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Analyse the consequences of current factors and trends on financial services.

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Introduction

Transfer-Encoding: chunked I am currently working as a trainee journalist for ITV and I have produced articles them and researched and provided production for the financial services in the UK. Word is getting around about my knowledge and understanding and the FCA has invited me to address its members. I now am going to produce a report to the FCA analysing the consequences of current factors and trends and their likely impact on financial service provision in the next five years. Demographics are likely to have impact on financial services provision. In the UK we have an ageing population problem and this has implications on the provision of pensions. Life expectancy for men is 78 and for women is 82. However, if you reach 65, it increases to 84 for men and 86 for women. Because we have an aging population it means people are living for much longer and puts strain on the government because they are forced to pay state pension which is around £155.65 a week for a longer period of time. In the next 5 years the pensionable age for women will increase from 60 to 65 which means that the government will save money on state pensions to women. ...read more.

Middle

Therefore by upgrading the ICT at post offices, it meant that anyone could go to a post office and open an account and the government could then deposit things such as pensions into these accounts. In the next 5 years, people with banking accounts will increase due to the easiness and effectiveness of internet banking. Also post offices will be offering more retail banking facilities and will be widely used such as credit cards, mortgages and loans. With the change of technology, this problem will slowly decrease due to the widespread of the internet. Furthermore, low inflation will have impact upon financial service provision over the next five years. This has implications for endowment policies returns and retirement annuity rates; these policies can be linked to the rate of inflation which is currently 0.5% in the UK. If the rate is very low like it is currently, it means the monthly payments are not going to rise and therefore the returns will be fairly low in time to come. However, if the inflation rate is higher, the monthly payments will go up. ...read more.

Conclusion

Lastly, 0% APR finance means that if you get finance for an expensive product you do not get any interest. In the next 5 years, more innovative and new products will come into the market. Lastly, the credit crunch has impact upon financial service provision over the next five years. The credit crunch started in the USA and banks were providing loans and mortgages to unreliable borrowers who has low credit history and income and they couldn?t pay is back. The government had to then pay the banks out with tax payer?s money. This had direct impact on savings and mortgages because the banks now conduct in depth research on the customer before providing them any financial services as they do not want to make the same mistake again; it will be a lot harder to obtain mortgages and loans. In the next 5 years the economy will improve and people?s salaries may improve. The banks will not lower their policies on loans and mortgages because they have learnt from their previous mistakes. In conclusion, there are many factors and trends likely to impact upon financial services provision over the next five years in the form of demographics, nature of work, financial inclusion, low inflation, technological developments, distribution channels, innovation and new products and lastly the credit crunch. ...read more.

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