Retirees spending freely

December 14, 2007

As the ‘baby boomer’ generation begins to join the ranks of the retired so policy makers must a fresh look at their behaviour as consumers, says a new study funded by the Economic and Social Research Council. Far from being simply media creations, it seems that the caricatures of ‘silver surfers’ and ‘Saga-louts’ have some basis in truth as the lives of older people increasingly mirror those of the rest of society in terms of their spending and leisure activities.

‘From passive to active consumers: ageing and consumption in Britain 1963-1998′ – research based on an analysis of the Family Expenditure Survey (FES) made compared how people’s spending on goods and services as well as household income has changed over time. 

Dr Paul Higgs, from University College London, who led the research, explained: “Preceding studies have neglected the changing cultural context of the consumption patterns of older people, and so we wanted to see how they had participated in consumer society.”

The study explored expenditure patterns by retired households, with particular emphasis on food, fuel, alcohol, clothing and household goods. Results suggest that retired households do not now differ greatly from each other in their expenditure, despite some variations based on income.

Overall, successive generations of retirees have increased their consumption of goods with, for example, later generations spending more on leisure activities such as holidays. 

According to Dr Higgs, most retired households are now participating as contemporary consumers. He explained: “Those retiring today helped pioneer the creation of the post-war consumer culture – young people in the 50s, 60s and 70s had more money than previous generations and an increasing range of things to spend it on. We believe that this experience has informed the way they behave in retirement, with recent retirees strongly defined by the impact of consumer society on their lives and expectations.”

All income groups spent less on food – down from just under a third to just over a quarter of total expenditure – whilst spending on household goods rose from around four to just under 10 per cent. Spending on fuel was reduced, while that on alcohol and clothing remained broadly similar.

Researchers also compared patterns of ownership of selected consumer goods amongst the retired population compared to the employed and unemployed, and found that patterns had converged over time. Whereas the spending habits of these different groups was distinct in the 1960s, ownership of telephones, televisions and fridge/freezers, for example, have since increased and evened out. Ownership of newer household goods such as microwave ovens and VCRs showed similar patterns over much shorter periods of time, with clear differences in 1993 narrowing by 2001. 

However, the research also highlighted that whilst levels of washing machine and PC ownership had risen for all groups, the retired and unemployed continued to lag behind the employed. Less than two per cent of retired households owned a PC in 1993, and whilst this figure had risen ten-fold by 2001, PC ownership in employed households more than doubled to over half during the same period.
Source: Economic and Social Research Council

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