While often painted as a risk to our economy, new research published by International Longevity Centre shows that the UK’s ageing population brings economic opportunities through older people’s growing spending, working and earning power.
By 2040,says the research, older people will be spending 63p in every pound spent in the UK economy, rising from 54p in 2018 and they add tackling the barriers to older people’s spending could add 2% (or £47 billion) to UK GDP a year, by 2040.
The report, from the UKs specialist think tank on the impact of longevity on society, finds that households headed by someone aged 50 and over have dominated total expenditure (excluding housing costs) since 2013. And spending by older consumers will continue to rise significantly over the coming decades, from 54% (£319 billion) of total consumer spending in 2018 to 63% by 2040 (£550 billion).
As people aged 50 and over shift their spending towards non-essential purchases such as leisure, the top three growing sectors for older consumers will be recreation and culture; transport; and household goods and services.
According to the ILC’s analysis, tackling barriers to spending by people aged 75 and over could add 2% (or £47 billion) to GDP a year by 2040.
People aged 50+ are also making an increasingly significant contribution to the economy through their work. The share of the workforce aged 50 and over rose from 26% in 2004 to 32% in 2018, and it could account for 37% by 2040. People aged 50 and over earned 30% of total earnings (£237 bn) in 2018 and this is expected to rise to 40% by 2040 (£311 bn).
The report finds that supporting people aged 50 and over to remain in the workforce could add an additional 1.3% to GDP a year by 2040.
David Sinclair, Director of the ILC says
“As the population ages there are enormous economic opportunities, but these are currently being neglected.”
“There are enormous gains to be made by individual businesses and for the economy as a whole if we can unlock the spending and earning power of older adults.”
“But too many people face barriers to working and spending in later life – issues like inaccessible high streets, poorly designed products, and age discriminatory attitudes require a serious response.”
“We’ve become accustomed to hearing our ageing population talked about as a bad thing – but the reality is it could be an opportunity.”
“However, we won’t realise this ‘longevity dividend’ through blind optimism about ageing. Instead, we need concerted action to tackle the barriers to spending and working in later life.”
“We need action to make sure our extra years are healthy years, we need accessible high streets and workplaces that are free from age discrimination and we need continued action to ensure that people have access to decent pensions in later life.”
“Realising the longevity dividend will require decisive action – of the kind we’ve yet to see from either business or government. For all the talk of baby boomers dominating politics, we’ve yet to see a serious response to the opportunities and this needs to change.”