The Money Advice Trust suggests categorising vulnerability within a Traffic Light system*:
Green Light: Potentially Vulnerable
If a customer is currently able to manage their finances, make informed decisions, and is not at risk of detriment due to their situation, then they are neither vulnerable nor particularly vulnerable. Instead, they remain as potentially vulnerable. However, in future, this could change.
Customers could, for example, develop an unexpected health condition which affects their ability to earn money (an individual factor) or experience an unwelcome change in their wider circumstances (such as the need to provide regular care to a family member). While the customer may be fine at present, things can change.
Amber Light: Vulnerable
These are customers who are currently in a situation which means they are more likely to experience harm, loss, or disadvantage than other customers. These customers will hopefully be identified as being in a vulnerable situation by a frontline member of staff or adviser, and will also hopefully receive help and assistance to avoid detriment to them. The firm’s aim here should be to return the customer back to the potentially vulnerable category (where possible), although this may take time.
Red: Particularly Vulnerable
These are customers who are currently at a greatly heightened risk of experiencing detriment compared to the majority of vulnerable customers. This detriment could also be far more serious in terms of its negative impact on the customer’s situation, and could be far more imminent. These customers need to be quickly identified by staff or advisers, and action needs to be swift and effective to avoid significant harm.