Royce Shook en Lifestyle, beBee in English, Healthy Living Workshop Facilitator and Trainer • Seniors Helping Seniors Health and Wellness Institute 14/11/2017 · 2 min de lectura · +200

Entrepreneurs are you ready?

According to a study boomers who retire fit into five spending types of spenders. Entrepreneurs who are ready and understand this shifting pattern will be able to start to cater to these consumer groups and should be very successful. Those who don’t pay attention will not do as well.

Group 1: Just Getting By

Consumers in this group spend more than 45% of their total expenditure on housing and bills.

Socio-demographic characteristics:

• Median age 70

• More likely to be headed by a non-white, single, widowed or divorced person

• More likely to be a renter, either private or social, than an outright homeowner

• More likely to be on low income and not receiving income from investments

• Furthermore, consumers in this group are disproportionately more likely to live in urban areas

Issues/risks:

Older consumers belonging to this group are less likely to have a family safety net, are more likely to be renters and tend to be concentrated in cities. As a result, as the group name suggests, individuals may struggle to afford day to day essential spending and cannot afford non-essential spending on recreation and holidays. Some individuals in this group are at particular risk in the event of rising rental costs or energy prices.

Group 2: Frugal Foodies

Consumers in this group spend more than 27.5% of their total expenditure on food and non-alcoholic drinks, and over 13% on furnishings and other household equipment (nearly twice the average).

Socio-demographic characteristics:

• Median age 70

• More likely to be a woman

• More likely to be on low income, and not have private pensions or income from investments

Issues/risks:

This group under-consume throughout their lifetime relative to all the other groups identified. Despite having a relatively low equivalised household income they consume a lower proportion of their income than any other group. For this group, longevity insurance may be a solution, but perhaps those in this group are less aware of the options out there and end up under-consuming as a result

Group 3: Prudent Families (1 in 3 families)

Consumers in this group are consistent savers; they spread their expenditure quite evenly on all items, except for restaurants and hotels, which they seem to enjoy more than other groups.

Socio-demographic characteristics:

• Median age 61

• More likely to be a woman, part of a couple and living in a larger household

• Have relatively high household income, likely to have private pensions and income from investments

Issues/risks:

“Prudent Families” are doing well. The only issue they might be facing is under-consuming, in that they could attain a higher standard of living given their means. However, consumers in this group also spend a lot more money on health than other groups do, and therefore some may be saving more money because they pre-empt declining health conditions. Having a larger than average family size, “Prudent Families” may also be saving in order to leave a bequest.

Group 4: Extravagant Couples

The “Extravagant Couples” like to enjoy their life and spend nearly 40% of their total expenditure on recreational goods and services.

Socio-demographic characteristics:

• Median age 65

• More likely to be part of a couple, but living in a smaller household

• High household income, having income from investments

• More likely to own their home outright

Issues/risks:

“Extravagant Couples” are not savers until very late in life so, despite having relatively high income for most of their lives, there is a potential risk that they could run out of money in later years. For this group, financial advice is likely to be particularly beneficial to ensure that they have the means of meeting their rather more extravagant retirement needs.

Group 5: Transport Lovers

“Transport Lovers” spend a very large proportion, up to 36% of their total expenditure, on transport – including the use of any other costs associated with their own vehicles.

Socio-demographic characteristics:

• Median age of 61

• More likely to be male, part of a couple and living in an average sized household

• High household income

• More likely to be buying their home with the help of a mortgage than other groups

Issues/risks:

Given the amount spent on transport right across the life-course, consumers in this group are likely to be spending money on their own cars, rather than public transport which older people may get concessions on. A potential risk for them is that health problems and disability in older age might prevent them from traveling as much as they might like to the detriment of their quality of life. Despite having high income, they do not spend as much of their income as the “Extravagant Couples”, and indeed consistently save during retirement


Entrepreneurs are you ready?