Online banking usage amongst over 55s up fourfold

In the past five years the greatest proportion of new internet banking users are in the over-55 age group, according to APACS, the UK payments association.

The five-year growth statistics for online banking show that the number of adults in the UK using online banking has increased by 174 per cent from 6.2 million in 2001 to 17.0 million last year. This includes a 350 per cent increase in usage amongst the over 55s.

In contrast, the growth in telephone banking has been less pronounced in recent years, and in December last year APACS announced that for the first time the number of people using online banking exceeded those using telephone banking.

Sandra Quinn, director of communications at APACS, said: “Our research shows that more and more people are turning to the internet rather than the phone to manage their finances. While younger people continue to make up the majority of online banking users, the greatest proportion of new internet bankers are the over 55s. As a group they have come to embrace the ease and efficiency that online banking offers.”

Similarly, the popularity of online shopping continues to grow. According to the 2006 data, the number of adults shopping online has more than doubled in the last five years, from 11 million in 2001 to over 28 million last year - an increase of 157 per cent. The most popular sectors in terms of the number of people buying online in 2001 were books, CDs, travel and clothes, and these remain the most popular sectors in 2006. Unlike on the high street where the debit card reigns, the credit card is the most popular online payment method, with 252 million transactions last year, an increase of 29 per cent on the previous year. The preference for using this type of card for online shopping is probably because of the increased protection credit cards provide.

Sandra Quinn said: “The internet has become part of our everyday lives and we increasingly rely on it to manage our finances, pay our bills and buy our weekly supermarket shopping. While confidence is growing in internet security, everyone needs to do some basic things to make sure they stay safe online.”

“By following simple tips such as making sure your computer has up-to-date anti-virus software and a personal firewall installed, you can minimise your chances of being a victim of online fraud. Similarly, a good way to help keep your card safe from being used fraudulently on the internet is to sign up for Verified by Visa and MasterCard SecureCode – you simply register a private password with your card company and use it when you shop online at participating retailers.”

In addition, the APACS data shows that those who use online banking typically make more purchases per year on average than non-internet bankers. Online banking customers make 29.2 purchases while non-users make 16.4 per year. Those who use both telephone and online banking make the most purchases, buying goods or services online on average 31.7 times a year.

Likewise, internet shoppers are more likely to use the full functionality of their online banking service than those who don’t shop online. For example, 65 per cent of online banking customers who also shop online use their online banking to set up standing orders, compared with 42 per cent of those who don’t shop online.