Ipsos MORI Thinks

Grey power: politics, money and influence

4.1 Grey power to the people
4.2 Political views in later life
4.3 How ageing affects our politics
4.4 Finding common ground?
4.5 The force of political nostalgia
4.6 Selling nostalgia
4.7 A seat at the table
4.8 Wealth and assets
4.9 Selling to older people – the underserved later-life economy

Old age and treachery will always beat youth and exuberance

The depictions of people in later life in popular culture – the ‘doddery but dear’ archetype – belie the vast power that is wielded by older people. Socially, politically and economsociically, older people are a force to be reckoned with. As societies age, understanding this dynamic will be ever more important.

Grey power to the people

Higher voter turnout among older age groups has been a consistent finding in years of election analysis. Across a range of countries, encompassing different electoral systems, party politics, socio-economic development and democratic experience, there is one constant; whatever the weather, it’s the old folk who will
turn up and vote. Indeed, “we are so used to this fact that we forget how unusual the stability of the finding is”.98

Recent discussions on the relationship between voting and age have tended to focus on falling turn-out linked to cohort effects in individual countries, such as Germany, Canada, Britain or the United States.99 These studies have all detected distinct generational variations within each country which, crudely put, highlight how each successive generation is less likely than the one before it to vote. A decline in turnout at Canadian national elections, for example, can be explained by a long-term decline in political attentiveness and civic duty to vote across generations.100

Not to be a republican at 20 is proof of want of heart; To be one at 30 is poof of want of head

There’s also the example from the UK. Much was made of the ‘youthquake’,101 which was given as the reason for Labour’s unexpectedly strong performance in the 2017 general election. The British Election Study team, however, argue that the evidence for this is anecdotal; that young people were chanting ‘oh, Jeremy Corbyn’ at the Glastonbury Festival, or that Labour engaged young people effectively via its social media strategy, doesn’t necessarily translate to more young people making their way to the ballot box. Instead, an analysis of the turnout figures showed that in both the 2015 and the 2017 UK general elections, older people were much more likely to have voted than young people, and that the age-turnout relationship barely changed.102

We can see this pattern in Ipsos MORI’s own generational analysis,103 conducted using the British Social Attitudes Survey.104 Our work has shown that 20% of Millennials say they identify with a particular party, compared with 50% of the Pre-War generation. This isn’t just a UK phenomenon either – though it is more pronounced here. Germany has one of the closest patterns to the UK; the overall level of attachment to parties is very similar (around 50%), but there are gaps between the different generations with, again, the Pre-War generation always most likely to feel close to a single party.

France also has a significant overall gap between the oldest and youngest generations, with 68% of the Pre-War generation saying they feel close to a political party – twice the proportion of Millennials who do (34%).

This lack of political party engagement translates directly to certainty to vote. But why are older people so committed to exercising their democratic right? It could be just down to habit; like any other behaviour, the more you do it, the more habitual it becomes.105 The relatively low frequency of voting, compared to other forms of human behaviour suggests that pure environmental cues (like an election advert) are not enough to generate an automatic response – we are always required to use some cognitive process to decide whether or not to vote.106 Nonetheless, voting gets easier with age. Over the course of a lifetime the cache of situations that we know (or think we know) grows steadily. Voting is just one example; even though the political realities of what we are voting for are incredibly complex, we use our past experience of voting as a cognitive short cut. The easier the decision to vote, the more likely it is that we will show up.

Why vote repeatedly? Especially when it can be argued that the more you vote, the more likely you are to feel that your individual vote doesn’t necessarily make a difference. This is where social norms come into play; the older we get, the more likely we are to adhere to the social norm of voting. Voting is a socially desirable behaviour, and most people maintain that we should vote.107 Further, the act of voting can be observed (directly, seeing people in a line at the polling station or indirectly, by reading about turnout figures) and “is a moral rule that brings social gratification for the voter”.108 As we age, and we become more entwined in the society in which we live (we know more people, have had a greater number of interactions, might play a social role in civic society) we will, therefore, personally know more people who ascribe to the view that voting is something that should be done. Therefore, the pressure of the social norm gets stronger as we get older and, at the same time, the process of voting gets easier because we can call on our past experience – it seems ‘normal’ to vote.

Political views in later life

The combination of the demographic weight of older people, and the high likelihood that they will vote, makes the grey vote one well worth courting. In the UK, it tends to be the Conservative Party that benefits from the support of older people. It is of note that the 2017 general election was the first in our polling history where a person’s age was a stronger predictor of their voting behaviour than their social class. The same pattern repeats itself in the US. Pew Research Center’s political typology,109 which sorts voters into cohesive groups based on their attitudes and values, has identified eight core groups. The youngest age group includes the smallest proportion of Steadfast Conservatives (defined as strongly ideological, highly engaged, staunch critics of both the government and the social safety net and very socially conservative) and the largest proportion of the Next Generation Left (relatively affluent and very liberal on social issues like same-sex marriage and abortion). Conversely, among those aged 65 and above, we find the highest proportion of Steadfast Conservatives and the lowest numbers of both Next Generation Left and Solid Liberals (people who express liberal attitudes on government, the economy and business, and foreign policy, as well as on race, homosexuality and abortion – and who are reliable and loyal Democratic voters).

We find this too in the Ipsos Global Trends Survey, which suggests a higher level of conservative sentiment among older people – although not to the extent we might expect. Globally, eight in ten people aged 60-64 agree the world is changing too fast – but three quarters of the youngest global citizens do too. Conservatism of this sort appears higher in emerging markets; those of all ages in countries including China, India and Brazil agree that the world is changing too fast (85% for 16-24s, and 89% for 50-64 year olds). Among the young in ‘western’ countries, two thirds believe things are changing too fast, rising to 78% of the oldest bracket (50 to 64-year-olds) – higher but still well below the level in emerging countries.

It’s tough to disentangle why this is; whether being born in a less progressive era makes people gravitate towards more socially conservative political parties, or whether the very process of ageing itself makes people more ‘small c conservative’?

Firstly, it’s important to look at the impact of cohort effects – the shared experience of a group born during a certain time period. It’s hard for us today to imagine what society 70 or 80 years ago would have been like; in the UK homosexuality was illegal and women had only recently gotten the vote. In the US, segregation was still ongoing, India was still under British rule and in Germany the Berlin Wall hadn’t even been built, never mind brought down. However, we are much more open to political influences between the ages of 15 and 30 (the ‘impressionable years’) than between 50 and 65.110

It, therefore, matters when a cohort comes of political age. In the UK, analysis suggests that voters who came of political age during the Thatcher or Blair years, on the whole, care less about politics which, as a cohort, makes them less likely to vote.111 Further, there are high levels of disenchantment among these groups with ‘formal politics’ – of which voting is a key part.112 Although, of course, individual views can change, the cohort as a whole will carry the perception of a lower benefit value of voting through their lifetimes, making it less likely that they will vote in years to come.113

Similarly, in the US, research by Colombia University has found evidence of this ‘generational imprinting’.114 Combining data from multiple surveys, they found five main generations of presidential voters: New Deal Democrats, Eisenhower Republicans, Baby Boomers, Reagan Conservatives and Millennials.115 The Pew Research Center116 has also highlighted that generations carry their formative political experiences with them throughout their lifespan; Americans who came of age during the Truman and Eisenhower administrations, and are now in their 70s and 80s, have fairly consistently favoured Republican candidates, while those who turned 18 under Bill Clinton and his two successors have almost always voted more Democratic than the nation as a whole.117

How ageing affects our politics

The very process of ageing also has an effect on what people think and how they vote. An analysis of the 2014 British Election Study118 took the average of seven different groups of several thousand people, covering most periods between general elections since the 1960s, and found that the maximum possible ageing effect averages out at a 0.38% increase in Conservative votes each year and the minimum 0.32%. Now, written down, this might not feel like a lot but, over the course of a lifetime, it adds up. Even if the minimum estimate is correct, it makes the difference between 20 and 80-year-olds nearly 20 percentage points. This difference is reflected in the voting figures from the 1997 general election: only 24% of voters aged 20 voted for the Conservative Party, compared to 42% of those aged 80.

This is not just a UK phenomenon. In Germany, a longitudinal analysis of 20,000 Germans found that, as they aged, they became less open to new experiences.119 This matters because openness tends to predict liberal attitudes.120 Another study, conducted in Belgium and Poland (two countries with markedly different post-war experiences) found this same pattern.121 One reason for these personality changes could be that, as we age, we have an increased ‘need for closure’, i.e. it becomes increasingly important to minimise uncertainty and ambiguity.122

Another explanation is that these changes are attributable to the deterioration of the brain, which happens naturally with ageing. Bill Von Hippel, a psychologist at the University of Queensland in Australia, finds that older adults want to be fair and restrain prejudicial thoughts. The problem is, they literally can’t control themselves. He states that: “A lot of research shows that older adults suffer losses in their ability to inhibit unwanted thoughts … we have found that older adults who try to prevent stereotypes from influencing their judgment typically find that they rely on them more and more as they age … Ageing will tend to make many people more negatively disposed toward immigration.” He argues that, as we grow up, we are constantly exposed to stereotypes which we can recognise, even though we may not believe or act on them. He also states that it takes mental effort to silence these stereotypes and to think of people in a more balanced, and rounded way. However, he also argues that as we age and our frontal lobes – the part of our brain that drives mental effort – degrade, then we lose our ability to discount these stereotypes, even if that is our intention.123

Finding common ground?

The electoral power of the grey vote is often seen as driving political decision making. Take the case of pensions, or social security. There is no doubt that electoral maths has a part to play in how this policy area is treated compared to others. In the UK, pension spending and other benefits for the elderly (like the Winter Fuel Allowance, and free travel) have been preserved by the Conservative government (who happened to secure more party funding from dead people’s legacies than it did from actual living members in 2017124), while working age benefits – which account for less than half of the social security budget – have shouldered almost the entire burden of the government’s austerity measures. In the US, the power of the AARP, referred to as both the “most powerful lobby in America” and, less flatteringly, “the 800lb gorilla of Capitol Hill”125 has been thought to orientate public spending on social security, one of the ‘third rails’ of American politics. In Italy, pensioners’ unions have been cited as a block on reforming a welfare state which unfairly benefits the elderly at the expense of the young.

This all presupposes that each generation votes in their own self-interest; that older people cast their vote for the politicians promising plentiful pensions, while younger people vote for those offering better access to homes, jobs and education for their families. There is, of course, some truth to this. An analysis of British Social Attitudes data highlights that there are life cycle effects at play; people’s preferences and awareness of what they may need money for shift at different stages in their lives – older generations are most likely to prioritise old age pensions for extra spending – and people become more inclined to make this choice as they get older. The proportion of people from Generation X making pensions a first or second priority for extra spending has doubled since 1995, as that generation has crept closer to retirement age.126

But, this is far from the whole story. In discussions with older people we have found that, far from them being self-interested, they express considerable concern for the future of younger generations in a more uncertain socio-economic climate. Indeed, when asked who they think needs most help from the state, it was the older participants who spontaneously mentioned younger people, recognising that they have not benefited from the same advantages – like easy access to jobs, free education, affordable homes – that they have had. As one participant, born pre-war, put it: “I know we all moan about the people who take advantage, but there are people that need it [help from the state] – the young people.”127 There’s a similar picture in the US. A GWU Battleground poll in March 2018 showed that gun crime (with particular reference to school shootings in the wake of Parkland, Florida), concerns about North Korea’s nuclear capability and immigration were the issues most concerning older voters – not social security or Medicare.128

Indeed, the narrative about older people wielding too much political influence doesn’t really seem to have taken hold with the public: three in ten, globally, agree with this.

Nostalgia, that's what we want... The good ol' days... When we gave 'em hell. When the buck stopped somewhere and you could still buy something with it. To a time when movies were in black and white... And so was everything else. Gil Scott Heron, B Movie

The force of political nostalgia

The fact that older people are more likely to vote, and are more likely to be socially conservative, has shaped politics – both what is done, and how it is talked about. Underpinning this is one of the most powerful forces of the modern age; nostalgia. Uncertainty about the future in the post-2008 crash world played out in ongoing technological, social, economic and political upheaval – and a resulting nostalgia for a more certain imagined past – is now a key part of American and European popular culture.

In our Global Trends survey, we find that across 23 countries, half say that ‘I would like my country to be the way it used to be’. This figure rises to seven in ten (69%) in India and the US, two thirds (66% and 64%) in France and Belgium and three in five (62% and 59%) in Mexico and Italy. When we break these figures down though, we can see that this longing for the past is being driven by the older generations.

Take the UK. Overall – in line with the global average – half (49%) agree that they would like their country to be the way it used to be – though of course “the way it used to be” will evoke different time periods for people of different ages. But, whereas only two in five (43%) of those aged 18-24 agree with this sentiment, this figure rises to three in five (58%) of those aged 60-64. This same pattern is repeated the world over. In China, a quarter (26%) of 18 to 24-year-olds agree with this statement, compared to nearly half (46%) of those aged 60-64. In the US, half (50%) of those aged 18-24 agree compared to three quarters (73%) of those aged 60-64.

These demographic splits are evident when we examine other questions which tap into people’s longing for the good old days. In the UK, half (50%) of those aged 18-24 agree that people were happier in the old days when they had fewer problems to cope with. But this figure rises to seven in ten (68%) of those aged 60-64. In Russia this split is incredibly pronounced; three in five (60%) of those aged 18-24 agree with this, compared to nine in ten (91%) of those aged 60-64. Similarly, in Italy, the split is 58% versus 80%, and in the US 51% versus 76%.

This desire for the past is played out in modern politics. Think about recent political campaigns. Both Trump’s Presidential campaign slogan (Make America Great Again – which, incidentally, was stolen from Reagan) and the Leave campaign in the EU referendum (Take Back Control) played on nostalgia – the idea that things were better in the old days, and better than the imagined future. Even if we know that, objectively, this isn’t true in many ways, it doesn’t really matter because that’s what nostalgia is – “a form of curation where you cut the crap bits out”.129 For older people, this can be seductive, and has resulted in some of the most seismic political shocks of modern times.

Across 23 countries, half say that "I would like my country to be the way it used to be"

In the UK, 61 percent of voters over the age of 65 voted to leave the European Union, while 75 percent of voters under the age of 24 voted to remain. The leader of the Liberal Democrats, Vince Cable, called this out stating that too many older voters were driven by “nostalgia for a world where passports were blue, faces were white and the map was coloured imperial pink”.

While young people aged 18-29 in the US believe that america's culture and way of life' have changed for the better, those aged 65+ think that things have got worse since the 1950s.

Similarly, in the US, while the majority of those aged 18-29 voted for Clinton in the 2016 Presidential Election (55% versus 37% for Trump), this order was flipped when we analyse older voters; 53% of those aged 65+ voted for Trump, compared to 45% who voted for Clinton.130 As with Brexit, the link between these election results and increased diversity cannot be ignored. The oldest generation is considerably whiter than the youngest; 80% of Americans over the age of 65 are non-Hispanic whites, compared to 57% of 18 to 24-year-olds. This may explain their hankering after a bygone era; research by the Public Religion Research Institute and Brookings shows that, while young people aged 18-29 in the US believe that America’s ‘culture and way of life’ have changed for the better, those aged 65+ think that things have got worse since the 1950s.131 Thus, when Trump offered voters a chance to make America great again (i.e. not just great, but great like it used to be), this was something that resonated with older people who feel more uncomfortable with both the pace and nature of change in their countries. Not for nothing was the Trump campaign referred to as “a rebellion of the aged — a bygone generation’s last furious gasp against modernity”.132

Selling nostalgia

Don Draper knew all about the power of nostalgia to sell. In one of the most critically acclaimed and emotionally affecting episodes of Mad Men’s seven series, The Wheel, Don Draper wins the Kodak account by playing on nostalgia, evoking past memories and emotions in a highly charged pitch meeting. This is something that a number of brands have latched onto because “evoking the past – the games we played, the food we ate, the music we listened to – they all make us feel something”.133

Nostalgia - it's delicate, but potent. Teddy told me that in greek, 'nostalgia' literally means 'the pain from an old wound'. It's a twinge in your heart far more powerful than memory alone.

This kind of emotional hook is gold dust for advertisers because when we feel something, we’re more likely to do something.

Nostalgia is a simple way for brands to create an emotional response in us. We all like to think we’re savvy – that we’re not affected by advertising. Brands, therefore, face an uphill battle in getting us to feel anything. But tapping into our memories of times past – just like recent political campaigns have done – bypasses our cynicism.

The success of Pokémon Go in 2016. The recent McDonald’s advert which marked 50 years of the Big Mac by encouraging people to remember the first time they tried one.134 Adidas’ re-release of Superstars, Stan Smith and Gazelle trainers from decades before. Halifax ads featuring Top Cat, the Flintstones and characters from the Wizard of Oz. The release of a MadLibs app in the US to allow American Baby Boomers to relive a childhood game in a digital format.135 Adobe,136 who used cult classic Bob Ross to advertise its Photoshop Sketch application for the iPad Pro. Burberry’s Heritage Range, any one of Buzzfeed’s many listicles about ‘how you know you grew up in the 80s and 90s if …’, and, of course, Hovis’ rattle through 120 years of British history in the advert titled ‘Go on lad’137 which was credited with raising sales by £12,000,000 in the immediate aftermath of its initial screening.

In an age of impersonal digital media, building social connectedness through nostalgia is an easy way for companies to leverage the optimistic feelings that often accompany walks down memory lane. Associating brand messaging with positive references from the 90s, 80s — and even the 70s — humanises brands, forging meaningful connections between the past and present. Given the buying power of the older generation – something we’ll explore later in this section – and our ageing societies, this trend can only continue. We like a little nostalgia too, but also think encouraging people to have time to reflect on what the past was really like – rather than selective memories of it – will be important.

A seat at the table

Older people don’t just wield political power thanks to the huge numbers of them who turn out to vote. Rather, you only need to look at our political institutions to see how dominated they are by those in later life; some commentators have gone as far as to say we now live in a gerontocracy.138

In the UK, Prime Minister Theresa May is a relatively spritely 62 years old – as her dancing suggests – while leader of the Labour Party, Jeremy Corbyn, is 69 and Liberal Democrat leader Vince Cable is 75. Even Gladstone, described by Randolph Churchill as “an old man in a hurry” was younger – just 58! – when he took office for the first time. The older age of these political leaders is out of step with the prevailing trend. Just a few short years ago in 2015, the seven political leaders who took to the stage to discuss the issues prior to the election in one of the televised debates – Cameron, Miliband, Clegg, Wood, Bennett and Farage – were all born within seven years of each other, between 1964 and 1971.139 Indeed, in recent times, politics has very much been a young (or rather middle-aged) person’s game; three of the four Prime Ministers who preceded Theresa May were all in their 40s when they took office, Gordon Brown being the exception. So, our older politicians today are something of an anomaly.

This same pattern is evident in the US. In one of the more dramatic moments in Senate history, the late John McCain rallied from recent surgery and a brain cancer diagnosis to cast a 1am vote that scuppered – at least for now – the Republican’s efforts to repeal Obamacare (which only passed in the first place thanks to 92-year-old Senator Robert Byrd who was wheeled out onto the floor for three vital votes in 2009). Indeed, given how many of the top positions in America public life – in the Senate, in Congress and in the Judiciary – are held by people in their 70s and above then “we shouldn’t be surprised that a medical emergency interfered with Senate business”.140

To illustrate, in the Senate of 100 some 23 Senators are at least 70. Five are 80 or older. In the Supreme Court, four of the nine justices are older than 68, two are 78 or older, and several have serious age-related health problems. Looking at the top job, President Trump was, at 70, the oldest President to be inaugurated (Reagan was 69). With an eye on the 2021 inauguration, by then the three Democrats currently leading the race for nomination – Elizabeth Warren, Joe Biden and Bernie Sanders – would be 71, 78 and 79 respectively.

It’s not just politics where older people are wielding power. In boardrooms too, it’s older people who are dominating. The global average age of CEOs is 55 – and the most frequent age is 58. Among the nearly 10,000 CEOs of companies with a market capitalisation of more than £150m, for which age is available, nearly half are in their fifties. While just 4% of global CEOs are aged over 70, as life expectancy increases we can expect this proportion to grow.141

The global average age of CEOs is 55 - and the most frequent age in 58

Now, of course older people contribute meaningfully to public and business life. But the declining cognitive abilities that come with age should not be ignored either. Work conducted by the Mayo Clinic,142 which aimed to gauge the prevalence of mild cognitive impairment (MCI) found that of 1969 subjects aged 70-89 who were clinically tested to ensure that they did not have dementia, 329 (16%) had MCI. Therefore, as our population ages, and power is concentrated into the hands of increasingly older people, it will be essential that we develop appropriate checks and balances that capitalise on the unique skills and perspectives that those in later life can bring but, at the same time, provide safeguards for when declining health can get in the way of good decision-making.

Wealth and assets

Every summer we can rent a cottage in the isle of wight, if it's not too dear we shall scrimp and save...

Amid all the economic doom and gloom since 2008, one story has perhaps been played down; that if it wasn’t for older people, things would have been a whole lot worse.

In the UK, the grey pound has been helping to keep the economy moving.143 At £320 billion a year, the over-50s account for around 47% of all UK consumer spending, up from 41% in 2003, according to research from Saga and the Centre for Economic and Business Research. Without this input, UK economic growth would have been reduced by 4.2%.144 What’s more, ONS figures show that the average pensioner’s income increased by around 50% in real terms between 1995 and 2011, and that more than one in ten pensioners have a total wealth of £1 million or more – aided by spiralling property prices.145 Indeed, in 2017 UK pensioners enjoyed a faster rate of growth in their disposable incomes than working age adults, as guaranteed state pension increases outstripped wage rises. The ONS has stated that between 2008 and 2018, the median disposable income of retired households increased by £3,200 – for people in work it was only £900.146

In the UK, the grey pound has been helping to keep the economy moving

Further, while the growth in disposable income for older people is greatest in the UK, a higher than average growth is also seen across the other countries that were analysed in this study. The smallest growth for the 65-69 age group is seen in Germany, but this is still 5% above the national average. For the 70-74 age group the smallest growth is seen in Australia, but again this is still 2% above the national average.

We can see this same pattern in other countries too. In 2013, according to the latest census data available, the median net worth of US households headed by 55 to 64-year-olds, excluding home-equity, was $66,047, up from $51,026 in 2005.147 In Japan, those aged over 50 years old account for more than 80% of a total of 1.439 quadrillion yen of financial assets. Further, over the next three years, the average purchasing power of a household headed by someone in their 60s is projected to rise by about ¥580,000, while the figure for households headed by those in their 30s will fall by some ¥50,000. Germany’s silver purchasing power is estimated to be €316 billion.148

Of course, this isn’t the whole story, and increasing inequality is a cause for concern; the richest quarter of pensioners earn three to four times more than the bottom quartile. Further, 10% of individuals in the UK aged 55–64 are in households with virtually no non-pension wealth.149

Lack of awareness of what we need to save to be comfortable in retirement is a major challenge – as is awareness of just how long that retirement will be.

In the UK, for instance, we asked people how long they could expect to live for in retirement on turning 65. The average guess was 19 years when, in reality, the figure is 23 years. At the same time, we have little idea just how much we need to save for later life. We asked, assuming people were claiming a full state pension, how much would someone need to have saved in a private pension plan in order to get an income of £25,000 per annum in retirement. The average guess was £124,000 when the actual figure is £315,000.150 While we get more accurate as we get older, by then it may be too late to do anything much. Those aged 65-75 estimate that they will need £250,000, while at the other end of the scale, those aged under 30 estimate only £80,000 – little more than a quarter of what they would actually need.

Based on these figures, it’s tempting to say that awareness, knowledge, confidence and responsibility increases with age. For many, the simple experience of owning more financial products and having more interactions with providers as we pass through major milestones in life, such as buying a car, getting our first house, having children, and retiring, does increase our financial knowledge. But for others, we have found through qualitative research that if you have kept things simple, haven’t perhaps been as financially responsible as you could or should have been, or embraced modern digital banking, there can come a point of no return, where you feel you are stuck as you are, left out of the main system, unsure of what to do, and without enough time left to save. This is demonstrated by the fact that it is Millennials, and not the older pre-retired, who are leading the way in personal pension participation, as discussed later.151 This is not to say that Millennials are on their way to a comfortable old age though – far from it!

Vulnerability can come in a range of guises and can be temporary, sporadic or permanent in nature.

For all of us, at whatever age, there are obvious pressures of rising housing costs and incomes that haven’t kept pace with inflation, meaning that many people simply feel they do not have enough money to save. Then, for those who are putting money aside, shorter-term goals such as home ownership or holidays often take precedence over longer-term goals of saving for retirement, meaning that it can often be a case of too little, too late.

One major concern that blocks the pre-retired from hoping to emulate the comparative wealth of the retired, and is preventing some retired from maximising their wealth, is lack of knowledge and confidence in financial management. This is coupled with ‘the advice gap’ of consumers who are either unable or unwilling to pay for professional advice (in the UK, this is a result of the Retail Distribution Review and abolition of adviser commission in favour of up-front, transparent advice fees), but who needs to save if they are to have hope of a decent retirement.152 Many feel that traditional financial advice isn’t for them, and the rise of robo-advice may help to fill this gap to a certain extent, but many consumers are simply going without professional advice, and managing their finances alone. This places a huge burden of responsibility on individuals, which has increased further with the rise of defined contribution pension schemes and pensions freedoms in the UK, meaning we have important decisions to make with these pensions when we reach 55.

With interest rates at record lows, traditional savings accounts are less useful to us than they used to be, with 48% saying they need interest rates to rise if they are to save enough to be comfortable in retirement.153 This, and pensions freedoms, when put together means that most of us are, or should be, investors. But investing is a frightening word for many, with qualitative research indicating it is frequently linked with the wealthy, complexity and risk of losing everything, as well as more of the domain of those who are older and predominantly male. While it is absolutely understandable and right to be cautious of risk, especially when it comes to safeguarding retirement money, are we over-cautious about volatility and risk? Bearing in mind inflation, putting all your money in cash or no risk miniscule interest savings accounts will damage the long-term financial health of many of us, leaving comfortable retirement even further out of reach. For those of us in the UK, we can hope that Open Banking and Pensions Dashboards, if and when they become a reality,154 will help us all to have a better view of our entire financial situations, including all pensions and other savings and investments, and this will help us to take action to become better prepared.

But legislators and financial services providers would also do well to bear the following in mind when thinking about how to help the current – and future – old get financially ready for later life.

  1. Older people are embracing digital. There can sometimes be an assumption made by financial providers and others that young people want to do everything online, and older people are still mainly offline. But while digital adoption is more prevalent among the young, in the UK, 90% of 55 to 64-year-olds and 70% of those aged 65+ are online,155 and many of them are using digital financial services. It is also thought that embracing digital can help us save for the future, with 47% of working-age people believing new technology makes saving for retirement easier, and 55% believing that new technology will help give future retirees a better standard of living.156
  2. Real challenges remain. Adults aged 75 years and over have consistently been the lowest users of the internet – though they are closing the gap on younger generations. In 2011, 20% of adults aged 75 years and over were recent internet users, but this rose to 44% in 2018. And of the 4.5 million adults who had never used the internet in 2018, more than half (2.6 million) were aged 75 years and over. Many of these older people have a need, as well as a preference, for banking in person, may live in rural areas, and can feel increasingly isolated and cut off from mainstream banking as bank branch closures increase and access to cash becomes more difficult in some areas.157
  3. And we are at greater risk of being more vulnerable as we age. The Financial Conduct Authority (the FCA) have stated that “vulnerability can come in a range of guises and can be temporary, sporadic or permanent in nature”.158 Anyone can be vulnerable at any point in their lives, and indeed all of us are likely to be vulnerable at one time or another. However, it is of course true that we are all more likely to be vulnerable as we get older, with 60% of those aged 65 and over in the UK showing characteristics of potential vulnerability,159 and being ’older old’ – over 80 – correlates with physical or mental impairment. One million people in the UK will have dementia by 2025, and this will increase to two million by 2050.160 Financial management is complicated enough, but difficulties trying to manage your finances when you have dementia or Alzheimer’s Disease increases considerably, and financial providers need to be more mindful of this, taking steps to understand dementia, and other health and non-health related vulnerabilities of older consumers, and provide the mechanisms to help support them, if they are to help prevent potential harm.161


Selling to older people – the underserved later-life economy

So, while it isn’t the case for everyone, some of those in later life do have money to spend. The question is, are they able to spend it?

Leisure and tourism is undoubtedly one of the great beneficiaries of the grey pound, with spending by those aged 65-74 rising by 51% in real terms between 2002 and 2012, against just 17% for all UK households. The over-50s now account for the majority of the nation’s spending on travel and tourism and, in doing so, poured some £37bn into the hotel and travel sector.162 Further, UK government figures also show that the over-50s are the top spenders in a host of other categories including food, clothing, household goods, services and eating out.163 Indeed, some are so concerned about the older generation blowing their savings that they have been dubbed the SKI set (Spending the Kids’ Inheritance).164

But perhaps there is no need to sound the alarm bells about those in later life burning through their savings just yet. While those in later life aren’t spendthrifts, when they shop they’re at least savvy about it. According to work undertaken by advertising agency J. Walter Thompson,165 women over 50 love a bargain – and don’t mind doing the work to get one. Seven in ten (72%) look online regularly to compare prices and get a good deal, while four in five (81%) won’t make a purchase without checking on Amazon first.

While it isn't the case for everyone, some of those in later life do have money to spend.

The other question is, in spite of their spending power, whether the retail sector and FMCG have actually cottoned on to what those in later life want. Take retail. According to a survey of over 1,000 UK consumers undertaken by Data IQ, around four in five (82%) of those aged over 55 say their favourite retail brand no longer understands them or what they need.166 And their loyalty is fragile; nearly all (95%) said they would consider ‘cheating’ on their favourite retailer with a competitor. But what the over-55s want from their retail experience is not exactly rocket science; 56% want somewhere friendly and welcoming, where there’s no pressure to buy, 54% want somewhere which is age-agnostic, and welcomes people of all ages and sizes, and 50% want somewhere that is pleasant to wander around.167

There are companies meeting the challenge of creating an age-agnostic retail experience head on. US online lifestyle brand Garnet Hill created a mobile shopping experience inside an old shipping container. Women over 55 tend to be tactile shoppers, so this approach allowed them to feel the quality of the products for themselves.168 The campaign was a huge success, driving around two million social media impressions. Another US store, Lou & Grey has also endeavoured to create an age-agnostic shopping environment with its calm, spacious design, and products which carry multigenerational appeal. Swedish retailer, Cos, British clothing company Jigsaw and Australian skincare company Aesop are also doing likewise.169 This is what shoppers want; nearly nine in ten (88%) suggest that brands should focus on needs and interests rather than age, while four in five (83%) agree that age neutral and inclusive brands feel the most modern and relevant.170 Beyond this though, it’s debatable whether FMCG companies have yet truly realised to the buying power of this group. Many products developed specifically for older people focus on ill health and disability – dentures, adult diapers, treatments for hair loss and colour fade. There has been relatively little done to appeal to those who are fit and healthy. As Alison Sander, Director of the Boston Consulting Group’s Center for Sensing and Mining the Future states: “We are still waiting for fundamentally new products to meet the desires of this older consumer group.”171

But developing new products for older people typically falls on three major stumbling blocks. The first is that later life covers a vast range of people, all with different interests, tastes and needs. Therefore, designing something with near universal appeal is no easy task. But it is one there is appetite for. In work undertaken by the Age of No Retirement,172 a conglomerate of creative organisations with the aim of helping others realise the value in all-age thinking, they found that nine in ten people (91%) said that brands and businesses should ensure equal access for people of all ages.173

People don't really want to buy things that are for old people.

Secondly, and more prosaically, is the issue of packaging. When the finance director at Danone, Pierre-André Térisse, tried on an ageing suit – designed to mimic what it feels like to be in an older body – he realised just how hard it can be to pick up a bottle of Evian, or to distinguish between different flavours of yoghurt. These insights are now being channelled into Danone’s packaging design. Similarly, Nestlé recently redesigned the jar for Nescafé Gold in Australia, giving it a ‘waist’ and therefore making it easier for arthritic hands to open. While in the UK, that stalwart of the 1980s chocolate market, Black Magic, has had its box redesigned so that the font size has been increased, the finger scoops widened and the chocolates reorganised so that they align with the pictures on the lid.174

Thirdly, and perhaps most importantly, people don’t really want to buy things that are ‘for old people’. Given negative perceptions of later life that we explored earlier, this creates a powerful block on people wanting to buy things explicitly created for and marketed to ‘old people’. After all, there’s a reason why up to a quarter of those with hearing aids don’t wear them.175 What’s needed instead are more cross-generational products. Or, to put it another way, better design for everyone. Kitchen tool company OXO Good Grips emerged from innovator Sam Farber’s desire to create a better vegetable peeler for his wife who had arthritis, but the resultant product was something that could benefit everyone. Toyota and other manufacturers now increasingly fit cars with sensors, cameras and lasers, which will make it easier and safer for older people to stay on the road for longer.176 But they’ll make it easier and safer for everyone else as well.

What's needed instead are more cross-generational products. Or, to put it another way, better design for everyone.

But if the appetite is there to meet these challenges, then there will surely be growing demand. In Japan, the Chiba shopping mall just outside of Tokyo has been created for older people. Here, older people can benefit from easy access to medical clinics, get discounts on pension day, and sign up to classes. In Germany, shopping trolleys at the Kaiser supermarket come equipped with magnifying glasses.177 Now all that’s needed are better products to fill both.

Trust: The Truth?

We decided to write this report because we wanted to test if the prevailing narrative matched the data. The ‘truth about trust’ is that trust is complex, and takes many forms (many of these forms are not in crisis or decline). Without some degree of trust society simply would not function…