A new international report reveals the considerable – and growing – spending power of older people in G20 nations, and claims businesses and governments that fail to engage this key segment of the market will miss out.
Spending by older households in the G20 averaged 22% of GDP and was valued $14 trillion, more than the combined GDP of Japan, Australia, Canada and Brazil, the report states.
The report, which was launched ahead of the G20 Finance Ministers’ and Central Bankers’ meeting by UK think tank the ‘International Longevity Centre UK’ (ILC), said spending by older households accounts for 56% of all consumption in G20 countries – and is on the rise.
Sophia Dimitriadis, a research fellow with ILC, said older people should not be thought of as a “drain” on the economy.
“Older people are increasingly contributing to our economy by working, caring, volunteering, and spending their earnings,” she said. “People aged 50 and over are increasingly working and earning. They are transforming and supporting the economy by spending their earnings.”
The report suggests G20 countries must invest more in preventative health to unlock the spending potential of older households, a driver that has been coined the ‘longevity dividend’.
Increasing preventative health spending by only 0.1 percentage points in G20 countries could unlock a 9% increase in annual spending by people aged over 60, the report says.
“There are huge opportunities if we can help older people live healthy lives for longer,” said Ms Dimitriadis.
“Governments and businesses are ‘missing a trick’ if they fail to… invest in preventing ill health that stops too many from going to the shops or going out with friends,” Ms Dimitriadis said.
Leveraging the economic contributions of older people will be instrumental in the global post-pandemic recovery, the report suggests.
Governments and businesses must “create products and services that cater to an ageing consumer base,” Ms Dimitriadis said.
The report recommends removing barriers that exclude older consumers, such products, services and town centres that have been developed without older people in mind.
To release the potential of this market, the ILC is calling on G20 governments to deliver an ‘Ageing Society New Deal’ by:
Greater Manchester has made ageing central to its local industrial strategy.
Mayor of Greater Manchester, Andy Burnham, said, “I say to leaders in business, academia, health and social care, housing, culture and transport, come and work with us… and take advantage of the ‘longevity dividend.”
Nigel Wilson, Group CEO, Legal and General said, “Demographic change is unstoppable.
“Unfortunately, an ageing population is too often seen as a negative, when in fact alongside the challenges it can be an economic growth driver and a source of commercial opportunity.”