Over-50s insurance that costs SEVEN times the best rate: They claim to offer top cover for older people. So why do so many Saga and Age UK customers pay way over the odds?
Firms insuring the over-50s are routinely charging older people hundreds of pounds more than the cheapest deals available, Money Mail can reveal.
Our investigation into insurance rip-offs found specialist firms Saga and Age UK are often among the most expensive for older homeowners and drivers.
In some cases, new customers are being charged as much as £900 a year more than the cost of comparable cover elsewhere.
And in a further blow, loyal customers who remain with Saga and Age UK then face huge hikes in their premiums.
Specialist firms Saga and Age UK are often among the most expensive for older homeowners and drivers
The family of one long-standing 81-year-old customer discovered he was paying seven times more than the best rates available elsewhere.
Comparison site GoCompare obtained insurance quotes using genuine data for a 62-year-old married female chef driving a Fiat Panda and living in a four-bedroom detached house in Cardiff.
For home insurance, Age UK quoted £272 — almost three times the price of Tesco’s cover at £93 and Churchill and Privilege at £100.
It does offer a lower excess, though, at £45 compared to £100 to £200 for the others. Saga was also some way down the list, at £156 a year.
For car insurance, she was quoted £418 with Saga and £406 with Age UK. The cheapest quotes came from LV, Esure and Sheilas’ Wheels at £275 — a huge saving of £143 or £131.
The only notable difference in the cover was that Saga’s policy offered £10,000 of personal accident cover compared to £5,000 with the others.
A potential customer who asked Age UK why his quote was so expensive was told by executives that, at 52, he was too young to be in their ‘sweet spot’ for the best deals. But most customers say they’ve been given no explanation when they’ve found high charges.
Martyn John, of GoCompare, says: ‘So-called specialist insurers do not always offer the best value, so never assume that just because you’re over a certain age they’ll be the right choice for you.
‘Older drivers are typically attractive to insurers as they tend to be lower risk, so it’s likely that you’ll have a range of competitive premiums to choose from.’
Money Mail’s investigation last week exposed how Britain’s biggest insurers routinely charge their longest-standing customers up to three times more than new customers.
Experts say this is because insurers use existing customers’ premiums to subsidise the cheap deals they use to attract new customers.
Older customers are among those most at risk of overpaying, as evidence suggests they are less likely to shop around each year.
Firms such as Age UK and Saga claim to specialise in providing older homeowners and motorists with affordable cover.
They also pride themselves on being able to offer insurance to pensioners struggling to get cover elsewhere.
But the latest findings from our insurance investigation suggest these firms charge customers higher rates from the outset.
Businessman Andrew Brettell, 52, says the home insurance quote he received from Age UK was seven times higher than the cheapest deal on the market.
When shopping around to insure his home in Clapham, South London, he received quotes varying from £166 with Tesco to £1,155 with Age UK.
Andrew emailed Doug Strachan, managing director of the charity’s commercial arm, to question the quote.
One 61-year-old was quoted £418 for car insurance with Saga and £406 with Age UKm while the cheapest quotes came from LV, Esure and Sheilas’ Wheels at £275
Mr Strachan explained the reason for the ‘relatively uncompetitive quote’ was that ‘your young age puts you outside our sweet spot’, adding that less than 2 per cent of its customers are under the age of 55.
He said Age UK’s ‘sweet spot customers’ were ‘generally about 20 years older’ than Andrew.
Mr Strachan also said Andrew’s high-value property, flat roof and the high claims risk in his area had contributed to the dearer premium — though these factors had not prompted Tesco to charge anything like as much.
‘It’s outrageous,’ says Andrew. ‘Age UK is trading on its name and often dealing with vulnerable and older customers who don’t necessarily know they’re not getting value for money.’
A spokesman said the ‘private’ correspondence outlined a number of factors affecting Andrew’s premium, and added that its insurance was generally suited to people ‘of more modest means than this customer’.
Money Mail has received many emails and letters from customers who say their premiums rocketed after remaining faithful to a firm for decades. It was only after comparing prices elsewhere that they realised they’d been overpaying.
David Smith, 94, from Bridport, Dorset, discovered his premium with Saga had risen by 50 per cent, from £350 to £544, in a year.
He was told it was because he was in a flood risk area — even though he was last flooded in 1979. He has now found similar cover from John Lewis for £328.
Retired sales manager Jean Banks, 83, says her car insurance with Age UK rose by £308 in a year, despite making no claims and keeping the same car.
When she took out cover with Age UK two years ago, she paid £681 a year.
Businessman Andrew Brettell says Age UK home insurance quote was seven times higher than the cheapest deal on the market
The next year, it rose to £777 and then to £1,085 12 months later. She has now found a similar deal with Direct Line for £780.
The widow and great-grandmother from Essex says: ‘I trusted Age UK because it is a charity for senior citizens, but I felt very annoyed they had put it up so much for no good reason.’
Age UK says it cannot know whether Jean’s new cover was like-for-like ‘in every respect’.
Christine Finney, 69, of Lincolnshire, discovered her 87-year-old mother was paying £400 a year for her contents and buildings insurance with Age UK.
She had insured her house through the charity for ten years. When Christine posed as a new customer with the same details online, she got a quote for £198.
She then found more comprehensive cover with Churchill for £106 — a quarter of the original price.
Christine reported Age UK to the Charity Commission over its claims that it sells ‘products tailored to the needs of older people’.
She also complained to its underwriter, Ageas, who paid her mother £1,000 compensation after admitting it failed to investigate her initial complaint properly.
The Charity Commission said Age UK must learn lessons from this case and follow a transparent complaints process.
A spokesman for the charity says it was disappointed the handling of this case fell below expectations and has launched an investigation into its complaints processes.
He adds: ‘To make sweeping generalisations about Age UK insurance based on a single case or a few quotations is grossly unfair. While we have never claimed to be the cheapest insurer, we are actually quite often highly competitive on price.
‘Age UK policies have no upper age limit and have been recognised by Which? for customer-friendly features such as low excess payments, interest-free monthly instalments and no cancellation fees.’
A Saga spokesman says: ‘We recognise that offering new customers a discount to get them to try a service can be frustrating for customers, therefore we would be fully supportive of an industry-wide change, which is focused on a fairer, longer term pricing system.’
It aims to launch a loyalty reward scheme later this year.