Over 50s spending more on financial services

This year’s ‘Adult Media Use and Attitudes Report’ from Ofcom confirms one fact that we could have probably guessed anyway – that the use of smartphones by people over 65 years of age remains lower than any other age group.

However, the report makes clear that the generation gap is closing and that, in general, ‘Older people are embracing smart and social technology’.

The proof is in the statistics. For example, the report concluded that adults aged between 65-74 were more likely to have a tablet (of the computing kind) in 2016 than in 2015 by a ratio of 51% to 39%. Even in the 75+ age group, the shift was dramatic – 30% compared to 19%.

Four facts say it all:

1. Two-thirds of 65-74 year-olds use the internet
2. 3m people aged 75+ use the internet
3. The over 55s check their platforms every single day; for 88%, the main social media is Facebook
4. Older groups are big fans of tablets: 31% of those aged 65-74 use them; 15% of those are 75+

Why this is significant is that insurance companies and other financial service providers could be better aiming their marketing guns. In a recent survey of 50,000 people, SunLife found that 59% of the over 50s felt that they were being neglected or overlooked by the big financial services brands. It was even worse than the technology sector, where only a relatively modest 25% felt they were being ignored.

The same survey found that the over 50s spend 50% more on pensions, savings and investments than those under 50; in cash terms, that equates to an average of £150 per month on financial products compared to £100 for the younger age group. 62% of the same group said their money was “meant to be spent” and 56% said the cash was for them to have and they were not planning to give it to anyone else.

Who would have guessed that? As Dean Lamble, the CEO of SunLife, pointed out: “Over 50s make up one third of the population – by 2020 half of us will be over 50 – while spending by the over 50s is growing at three times the rate of those under 50. Yet brands are still obsessed with targeting the younger age groups.”

He concluded:

As evidenced by the statics, rising longevity rates are likely to swell this increasingly affluent section of the community. The challenge for marketers is to find the best and most cost-effective way to reach them.

Past experience has taught us that saturating the market with direct mail shots is inefficient and difficult to measure, and that TV advertising is very expensive, requiring big budgets (which is now less true than it was with the evolution of Sky AdSmart). Surely, given the appetite of this target group and its increasing tendency to use smartphones, tablets and laptops to embrace, amongst other things, social media, the answer has to be digital marketing. Communications still need to be honest, genuine and trustworthy, and delivered in the right tone, but the opportunity is there – all it needs is for financial services brands to shift their mindsets and choose the right channels to attract the attention of this most affluent of customer segments.