A combination of an ageing population, reduced public spending, the generosity of past pension schemes and the current housing shortage mean that Britain’s old age pensioners represent the most affluent demographic in the UK today. The grey pound – shorthand for the economic activity of these older citizens – is therefore an area rich in commercial potential.
Grey spending on the rise
A 2012 survey commissioned by SAGA and conducted by the Centre for Economic Business Research found that the grey pound accounted for almost half of all consumer spending. The report represented a powerful counter to the frequently heard suggestion that it is the baby boomer generation who are the key demographic behind the upturn in the British economy. The survey found that over 50s were responsible for 47% of all consumer spending and that spending amongst this section of the population had grown at an average of 4.4% over the preceding decade. The blunt cash figures are even more striking. The research identified a spend of £320 billion in 2012, £100 billion up on 2003.
SAGA have been highly successful in leveraging their association with this demographic, and organisations such as Hidden Hearing, an online hearing aid store who supply high quality assistive technologies for people of diminished hearing – often elder people – are establishing profitable advertising strategies that owe little to the conventional appeals to youth and beauty, but rather address a more mature and a more discerning marketplace. Barclays bank are perhaps the most high profile mainstream provider to directly identify this demographic.
There is, of course a grey area between routine household expenditure and the lifestyle assistive products such as those supplied by Hidden Hearing. But as the level of state funding available for public services continues to be affected by government austerity measures this sector is seeing a growing disconnect between demand and supply.
Age related products and services
Whilst it is often the big name drugs suppliers and suppliers of retirement accommodation and care homes who attract media attention, it is in the margins of the state/public supply relationship that businesses are increasingly delivering the solutions that the market needs. The figures certainly bear out that changing picture. Spending on health amongst the over 50s increased by 5.4% on average each year, increasing from £3.5 billion to £5.7 billion. The survey forecast this level of growth to continue, predicting an increase of 6.4% a year between 2013 and 2018 with spending reaching £7.8billion in 2018.
What Hidden Hearing and the likes of Specsavers now provide in terms of audiology other private firms are already delivering in terms of dentistry, mobility solutions, financial advice and much else besides. Whilst so much attention is inevitably targeted at younger, more dynamic sections of the population the financial reality is that a combination of student loans, high house prices (and mortgage deposits) and a lower level of home ownership means that the disposable income of those born after 1990 is considerably less than that enjoyed by their parents’ generation. And that older generation enjoys not only high pension incomes and high levels of housing equity but also abundant free leisure time. Any business looking for an expanding and affluent marketplace in which to operate simply cannot afford to ignore older customers. For many, targeting the grey pound is the new gold rush.