Generation LX

Wealthy over-55-year-olds are spending more on luxury goods than ever before, yet they are as diverse in their responses to advertising as any other generation. Marketers must not alienate them

Once perceived as a less lucrative demographic, UK businesses are now waking up to the value of the Charmed Generation, a group of around 2 million over-55s with the highest disposable income of any consumer age group.

This demographic has an estimated net capital worth of £1bn, according to research by 20plus30 Consulting and Royal Mail; a level of wealth for over-55s that is not expected to be repeated in future generations. Out of all people in the UK with a net capital wealth between £500,000 and £1m, 42% are 45to 64-year-olds and 40% are over 65; 18to 44-year-olds account for just 18% of this group.

This demographic of asset-rich consumers has evolved as a result of affordable housing in the 1960s – with properties significantly appreciating in value since – final-salary pensions, family legacies and prudent spending, with little reliance on credit.

The research reveals that the Charmed Generation is one of the major spenders on luxury goods and services compared with younger generations. Over half of consumers buying such goods are over 50, and 55-plus aged women spend 20% more on clothes each year than their 35-year-old counterparts. However, to make matters difficult for marketers, the Charmed Generation is composed of segments with a high degree of brand loyalty and others who are as likely to change brands as their children and grandchildren.

As a result of improved health, this generation also has an increased disability-free and healthy life expectancy, which has risen to 85 years for women and 80 for men. Consequently they are far more active than previous retired generations and, combined with their high level of spending power, take 37% more holidays a year than any other age group.

This over-50s market also represents the fastest-growing segment for both volunteer holidays and the youth hostel sector, as well as the second-fastest growing for “round the world” trips. The total number of holidays this generation take in comparison to younger tourists is 37% more in UK and 50% more in the US.

The Charmed Generation is also far more technologically advanced than people imagine. The most technology-literate segments of the generation are as likely to use the internet and MP3 players as the average 35-year-old. The website represents an important component of their lifestyle with 34% spending over 14 hours a week online, and the majority of them using the internet for online shopping. However, there is a significant drop in Net use by those aged over 65, resulting from their lack of experience using computers during their working life.

Advertising to the Charmed Generation is also on the increase, demonstrated by an 11.5% rise in direct mail targeting that age group in 2006. The task of influencing this generation is complicated by the range of reactions its members have to contemporary advertising.

Some segments of the generation have a high advertising literacy and relate to all types of advertising. But there is a significant group of the Charmed Generation who are alienated and annoyed by much of the current advertising output. Over 95% of the over-50s believe online advertising is not aimed at their age group, and rarely click on banner ads. But their understanding and propensity to use sponsored links is much higher, with nearly a quarter claiming to regularly click on them.

Royal Mail statistics show that the Charmed Generation has the highest response rate to direct mail (over 16%) of any group of consumers. Indeed, 42% of this age group say that in the past six months a mailing enticed them to become a new customer of a company and 48% say a mailing had encouraged them to buy from a company they already use, indicating high levels of brand loyalty. In fact, 23% of consumers aged 55 to 64, and 25% of over-65s agree with the statement “In the past six months I can think of at least one example where a mailing has enticed me to buy from a company I already use”.

The Charmed Generation is a market that has been largely ignored by UK businesses, however they are now realising their true value as both customers and to the wider economy. Businesses with relevant products and services – from holidays to financial services – are beginning to invest their time in understanding exactly what motivates this audience and how to market to them.



Sarah%20RobsonDo we truly understand the mature market, with all its complexities and seeming paradoxes? How do we effectively market to this ever-growing market? This “Charmed Generation” could well be the demographic companies have been waiting for; an army of insatiable consumers with a taste for luxury. 

But while some members of the mature market are indeed “charmed”, we must be careful not to treat the over-50s as a homogeneous group. They are but one demographic among a broad spectrum, which also encompasses those who live in poverty, and without the best data segmentation tools at their fingertips, marketers will not be able to successfully identify and target the charmed among them. This obvious lack of understanding of sub-groups that make up this market means that we’re at risk of potentially alienating some of the wealthiest groups in our society. Data segmentation tools can allow marketers to get their message across to the right people by successfully dividing the mature market into segments and avoiding the alienation potential of a “one size fits all” approach.
Sarah Robson, research director, Millennium


Dick Stroud, managing director of 20plus30 Consulting, contributed to this week’s Trends Insight





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