This would seem to contradict the stats with which we are often bombarded, that suggest that older consumers have personal assets that remain relatively untapped.
According to the Department for Work and Pensions, nearly 2m pensioners live in extreme poverty. A significant number are of the pre-war generation, many of whom believed that the state would provide, and consequently made inadequate provision for retirement. A large proportion of these will struggle with the rising cost of food and energy.
'About 25% to 30% of those in each group [50-60s, 60-70s, and so on] feel they have not saved enough to last them through retirement,' says Fiona Hought, managing director of Millennium, an agency specialising in marketing to the over-50s.
As consumers grow older, they have a tendency to grow more cautious. Their health may deteriorate, horizons narrow and needs become more centred on home, warmth and food. But because people are now living longer, and many older consumers have a 'younger' outlook, this process tends to happen later than it did 50 years ago. 'Today's over-50s are very different from their grandparents,' says Hought.
However, wealth is as much in evidence in this age group as poverty. People over 50 account for the ownership of 80% of all personal assets in the UK, 60% of total savings and 40% of consumer spending. They also account for 60% of all car sales, 50% of all holidays, and make up more than 33% of the population, a figure set to rise to 40% by 2031.
However, to characterise the over-50s as polarised between the wealthy, bent on spending their children's inheritance, and those living on the breadline, is too simplistic, says Hought. 'Our segmentation model distils the market into 20 segments by age and affluence. It challenges a lot of truisms and preconceptions about over-50s,' she adds.
Hought also believes that advertisers are missing a trick by sidelining older consumers as a single homogeneous group. According to Millennium, 86% of them feel excluded by advertising, most of which is youth-oriented.
The strategies of brands that target older people specifically, such as Stannah and Saga, are broadly effective. However, there is no need for marketers to think in such limited ways. Ads featuring silver-haired 'wrinklies' are not the way to tackle this market, as people over 50 do not think of themselves as 'old'.
Dick Stroud, author of The 50-Plus Market and managing director of specialist agency 20plus30, believes age-neutral advertising that speaks to a spread of generations is far more effective. 'Advertisers need to be smarter when marketing products that appeal to multiple age groups,' he says, citing Marks & Spencer, which uses a range of models including Twiggy, who is in her late 50s, as an example.
Stroud attributes the problem in part to a lack of empathy among marketers, who tend to be in their 20s, 30s and 40s. 'They are also conservative, and dislike being pushed out of their comfort zone,' he claims. 'A sizeable group of people receive a cash settlement of between £50,000 and £100,000 when they retire, and may want to spend some of it on a car or a once-in-a-lifetime holiday, but no one is speaking to that group.'
This segment encompasses 2.5m-3.5m over-50s who have benefited from defined benefit pension schemes, good returns on investments and a hitherto buoyant property market. They are, he claims, less likely to be affected by economic downturn than any other group.
However, there is a growing body of evidence that these assets have been prone to overestimation, and marketers should beware of generalising when it comes to older consumers. While they should by no means view the over-50 as a demographic without potential, they should also remain sentient that it is an age group as diverse as any other.
Datafile: older consumers
- 50- to 65-year-olds spend twice as much on leisure as under-30s.
- Over-50s buy 80% of all top-range cars and 80% of leisure cruises.
- 56% of over-50s have a PC or laptop, and 44% like the idea of using the internet.
- 70% have a mobile phone, and 46% have access to digital TV.
- About one in four people over 50 does not believe they will be financially secure when they get older.
- The average life expectancy is 79 for men and 83 for women, but half of those over 80 suffer from a long-term illness.
- 1.6m pensioners have returned to work, 45% for financial reasons.
- Source: Age Concern Action Research Services