The Centre for Economic and Business Research (CEBR) report for Saga, into the growing importance of the silver pound, shows that over 50s account for more than 47% of UK household expenditure in 2012, and this is on an upward trajectory – making them an increasingly important consumer group.
Further, the report finds that if the Saga generations spending had only grown at the same rate as under 50s between 2003 and 2013, UK GDP would have been depressed by 4.2% or £6.8 billion, and by 2018 would be depressed by some 6.8%.
Saga’s strategy director, Tim Pethick. commented: “People are living longer and have more active social and economic lives which is changing how we think about ‘retirement’. As a consequence the over 50s have become, through their hard work, big earners and even bigger spenders – today they account for some 76% of the UK’s financial wealth. Their confidence in the future has made them willing to lift their spending faster than other age groups and, in doing so they have helped drive the UK out of recession.”
We hope this report provides the knock-out blow to the “Pinch” enthusiasts who seek to denigrate the contribution of todays over 50s.
The key historical findings of the analysis are as follows:
The over 50s accounted for £320 billion (47.6%) of UK household expenditure in 2012.
The ‘silver pound’ has become relatively more important since the financial crisis, with expenditure among households of the over 50s making up a growing share of overall UK household expenditure.
The over 50s account for over half of UK household expenditure on health, recreation and culture, alcoholic beverages, restaurants and hotels.
Their share of total UK expenditure in the alcohol and tobacco, clothing and footwear, and restaurant and hotel sectors has risen by over eight percentage points in the past decade.
Sectors such as recreation culture, household goods & services, and miscellaneous goods & services, health, transport and communications have also seen the share of the over 50s of total expenditure rise by over 6 percentage points.
For the period until 2018, the key forecast-based findings of the analysis are as follows:
Over 2003-12, over-50s expenditure on health rose at an average rate 5.4% per year, increasing from £3.5 billion to £5.7 billion. Over 2013-18, this is forecast to accelerate to 6.4% per year, with expenditure reaching £7.8 billion in 2018.
By contrast, over 2003-12, over-50s expenditure on housing rose at an average rate 7.7% per year, increasing from £20.0 billion to £39.0 billion. Over 2013-18, this is forecast to decelerate to 5.9% per year, with expenditure reaching £53.4 billion in 2018.
Consumer spending by the over 50s is so economically significant that the UK’s GDP would be noticeably lower in each year of the forecast period if, since 2003, over 50s spending had only grown at the same rate as under 50s spending – i.e. at 1.2% per year as opposed to 4.4% per year.
If, as of 2003, over 50s consumer spending had only grown at the same rate as under-50s spending, by 2013 UK GDP would have been depressed by 4.2% or £6.8 billion, and by 2018, UK GDP as forecast would be depressed by 6.8%.
The report has been produced by Cebr, an independent economics and business research consultancy established in 1993, providing forecasts and advice to City institutions, government departments, local authorities and numerous blue chip companies throughout Europe. The main author of this report is Scott Corfe, Cebr Senior Economist.