This year, more than 800,000 people in the UK will turn the grand age of 50, and this number is set to rise until 2014 and probably beyond.
So it's little wonder that marketers are increasingly focusing on what they believe is a lucrative over-50s market.
Yet this view – of an affluent and unencumbered generation – is at odds with reality today.
Watson Phillips Norman has conducted exclusive research that shows all is not rosy with this consumer group, especially those at the younger end of the 50-plus age range.
We’ve found that nearly 60% of those who have recently turned 50, or who will be turning 50 over the next few years, are very concerned about having to financially support their children and/or their parents.
They are likely to be sandwiched between both, with the pressure further compounded by an all-too real possibility of having to work well into their 60s and 70s to ensure they can support themselves in old age.
This predicted squeeze is having an impact on intended purchase behaviour right now.
Our survey found that of those who were concerned about supporting dependents, 73% would consider cutting back on their own spending to help out their children.
In terms of what they would cut back on, 60% said meals out, 60% holidays, 85% luxuries, 15% food expenditure and 7% cited they would cut back on pension contributions.
The baby boomers have become the baby gloomers
This is a generation that has suffered a long period of falling real income, and inflation has hit 50-64 year-olds the hardest, resulting in a 1.4% decline in real income over the past year (Office of National Statistics).
Other key stats which illustrate the pressures this group are under include:
- University tuition fees rise to £9,000 a year from 2012, causing 23% of parents to save more or set up university accounts (ING Survey, 2011)
- Half of middle-class, grown-up children are now financially dependent on parents (Social Issues Research Centre, 2009)
- There are 2.8 million people aged 50 and over providing unpaid care in the UK (Age UK, 2011)
- The average age of a ‘child’ on a parent’s car insurance has jumped from 25 to 31 (Uswitch.com, 2009)
All of this points to the fact that "over-50s" is now an outdated marketing term.
Fifty is a completely arbitrary age today. While a few years ago it might have been a good marker for the "empty nesters" (the 50-65 age group) who historically had the most disposable income – mortgage paid off, no dependents, income from employment often coupled with good corporate pensions, etc – now these empty nesters have become, or are becoming, extinct.
So although being of a particular age and generation will naturally have a significant impact on a person’s outlook and emotions, purchase decisions are born out of key events and economic necessity.
It’s obvious that life events and experiences cause consumers to reassess what’s important.
We must recognise that today’s economic pressures have created a generation who are economically squeezed.
The burden of rising living, education and care costs means that for the first time, current third agers, as they’re also known, have less disposable income than their parents did and will approach financial decisions very rationally.
For marketers, the fluidity and changing nature of this group is yet another indication that age is no longer a clear marker through which to define target markets.
We need to understand that behavioural characteristics now transcend age when it comes to segmentation, and begin to build strategies around that insight.
Alison Meredith, executive planning director, Watson Phillips Norman