Investors say the growing wealth and spending power of over-50s is poised to accelerate a wide range of investment opportunities across multiple sectors in the UK.
Market experts say this age group, known as the “gray pounds” or “silver spenders,” is gaining more control over their assets. With greater wealth and more discretionary income, a large portion of this demographic is increasingly considered the new “idle rich.”
Dan Coatsworth, head of markets at AJ Bell, said the over-50s were an increasingly influential demographic in the consumer space.
“Those who are still working may be much further along in their careers, have paid off their mortgages and have a lot of cash at their disposal. They may feel entitled to splurge because they’ve worked hard for decades,” Coatsworth told CNBC.
“Retirees may be from a generation with generous defined benefit pension plans and have amassed significant sums of money to fund lavish lifestyles,” he added.
Mr Coatsworth said the group wanted to protect their wealth from taxes as much as possible, which meant seeking advice on taxes, investments and general financial planning.
Complexation of assets
Alix Wood, co-founder and chief investment officer of Curnow Asset Management, said there are clear subsets of winners and losers within this group.
He said that while “many” people’s daily lives were still “pretty tough and normal”, some were “perfectly successful in terms of growing their wealth”.
This latter segment of the wealthy population has an increasing desire for “never-before-owned” luxuries and “high-end” wealth management and insurance services.
These customers are increasingly looking for “content, stories, engagement and purpose” beyond traditional passive benefits, Wood added.
Hiscox.
He highlighted names such as insurance groups hiscox As older consumers turn to certain premium wealth management and insurance products, a potential winner is privately owned wealth manager Evelyn Partners.
“Banks are trying to buy back the wealth management industry,” Wood said, noting there has been interest in Evelyn Partners from China. natwest group and barclays That’s because private equity owners Permira and Varburg Pincus are looking to exit. “I think you’ll see some of them.”
Mr Wood, a contrarian stock picker who owns a hedge fund specializing in British stocks, outlined his main position in Saga at the annual Thorne London Investment Conference last month, which he said was partly a bet on the strength of the ‘silver pound’.
He said people living in the ‘Saga Years’, a term for travel and insurance brands focused on the over-50s, would account for around 60% of all consumer spending in the UK by 2030.
Wood added that Saga, which accounts for about 10% of Curnow’s portfolio, is a “grossly undervalued” business and its share price could soar more than 400% over the next few years.
“The list goes on.”
Wood said: pets at homeLondon-listed specialist pet food, toys and accessories retailer is also among the companies facing short-term pressures that could ultimately benefit from this trend, as older consumers buy more products for their pets and spend less on their children.
“Experiences and material things like vacations, good food, luxury cars, home improvements, beauty products and wellness will rank high on the list of places to spend money,” Coatsworth said of this group. “The list goes on.”
pets at home.
Coatsworth also said the healthcare sector is likely to be a winner as an aging population increases demand for medicines and treatments.
“Real estate investors with private care homes, retirement villages, and health care providers as tenants are among the winners of this trend,” Coatsworth told CNBC in an email.
