Lockdown not shutdown – How can we unlock the longevity dividend post-pandemic?
The wealth and spending power of older people is significant. Bringing this country out of the COVID-19 lockdown with a functioning economy depends on being able to unlock this power.
But they’re not spending as much of their wealth as we would expect – economists refer to this as “the retirement consumption puzzle”. This short policy report looks for the facts behind the retirement consumption puzzle. We tackle 10 potential answers to the question: Why does spending fall with age?
- Our health gets worse
- We don’t know how long we’ll live
- We want to leave money to others
- We don’t need or want as much
- We can’t get to – or around – the shops
- We can’t find suitable products or services
- PR, advertising and marketing agencies don’t remember or understand us
- Age discrimination
- We don’t have enough money
- The digital divide
After examining these potential pitfalls, we believe there are three key priorities to help older people spend more:
- We must invest in preventative health. As our health gets worse, we spend less. And keeping us healthier for llonger helps us work longer, as well as supporting spending on the things that are important to us.
- Products and places must be designed inclusively. For example, public spaces should cater for people who need to rest or use the toilet more often, and digital products should have control options that are easy to read and to manipulate.
- We must help people to get a better understanding of how long they’re likely to live, and create financial products that offer financial security for their whole life.
The UK Government’s Healthy Ageing Grand Challenge is a good start to engaging with the economic opportunities of an ageing population. But the economic crises facing us as a result of COVID-19 require much more. We need an “Ageing Society New Deal” alongside a Green New Deal if we are to maximise the economic opportunities of our ageing world.