(Older) people power: the economic opportunities of an ageing society

By James Carson

Responding to a recent Ask-a-Researcher request for information about Britain’s ageing population, I found that an online search generated a discouraging set of headlines:

“Ageing UK population will increase strain on public spending”

“UK faces ‘debt timebomb’ from ageing population”

“UK woefully underprepared for ageing society”

Further down the list was something more positive:

“Britain’s retiring workers have never had it so good. As well as being among the last workers to benefit from generous final salary pensions, many older people have housing wealth, having got on to the property ladder long before the boom that has priced out many younger buyers. And thanks to new pension freedoms, which came into force in April, the over-55s can now withdraw money from their pension funds.”

If anything, this article from The Guardian was a little too upbeat – there was no mention of the tens of thousands of older people enduring fuel poverty.

But the story does highlight the growing market which older consumers represent for products and services.

The demographic trends

In many developed countries, ageing populations are being driven by two demographic trends: a declining birth rate due to women having fewer children than in previous generations; and increasing numbers of people living longer, thanks to improvements in diet and medicine.

The global population aged 60 or over is projected to more than triple by 2050, reaching approximately 2 billion people. In the UK, the number of people aged 65 and over is expected to increase from 10.3 million in 2010 to 16.9 million by 2035.

Harnessing the economic opportunities from an ageing population

Surveys of household income and expenditure have reported that older people devote a greater proportion of their total expenditure to necessities, such as food and drink, housing, fuel and power. Luxury items related to recreation and culture are also areas of significant expenditure for older households.

With the abolition of the default retirement age, many older people are continuing to lead productive working lives, and have financial security. The STUC recently published a report highlighting the potential economic contribution of women over 50 to the economy, although noting that they are often ignored in labour market and economic policy.

In 2011, a report for the Centre for Local Economic Strategies (CLES) suggested that harnessing the spend of older people will be increasingly important for both the private and public sectors.

The research pointed to ways in which an ageing society might affect the economy:

  • Changes in housing needs may provide opportunities for developers and the construction industry to explore new types of housing provision to support older people.
  • Retired people, such as former business managers, may be interested in setting up their own business, or investing in local enterprises.
  • More retired people may become interested in playing a wider role in the community through voluntary work, something that may become even more important as public services are cut back.
  • Older people will also be increasingly important to the labour market, and there are opportunities to explore how their experience and skills can be best used.

Earlier this year, a report from the International Longevity Centre-UK also highlighted the importance of design and technology in responding to the needs of older people, and outlined what needs to happen in order for new technologies to live up to their full potential. Among the recommendations:

  • Ensuring homes meet lifetime homes standards and neighbourhoods adopt age friendly guidelines.
  • Tackling digital exclusion to ensure older people maximise the benefits of new technology.
  • Providing more evidence on what works to help designers, marketers and retailers understand the potential economic return of targeting older consumers.

The report provided some examples of innovative technologies that could make a significant difference to the lives of older people, including:

  • a kettle which monitors blood pressure;
  • lights which adapt to the level of daylight in a room;
  • driverless cars;
  • a secure platform enabling the management of bank accounts, bills and pensions through one simple portal.

The ageing population presents challenges for government, business and society in general. However, growth in this section of the population also brings with it emerging economic opportunities. That’s something worth remembering on this International Day of Older Persons.


 

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7 thoughts on “ (Older) people power: the economic opportunities of an ageing society

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