Pensioners are an underrated and underserved market

“THERE’S NOTHING WRONG with bingo and chicken,” says Tom Kamber, before explaining why you won’t find either in the senior centre he runs in Manhattan. Instead, members of the Senior Planet Exploration Centre are given VR goggles and other digital gadgets to play with, though most head straight for a wall of computers to check their Facebook accounts or shop online. A group of 15 seniors, some in their 80s, clad in sportswear, huddle around their fitness coach. People come for classes on starting their own businesses, using smartphones, booking travel on the web and setting up online dating profiles. “We just demystify the technology and away they go,” explains Mr Kamber.

Businesses could learn from this. With longer lives, more free time and a lot of cash, older people clearly present a “silver dollar” opportunity. In America the over-50s will shortly account for 70% of disposable income, according to a forecast by Nielsen, a market-research organisation. Global spending by households headed by over-60s could amount to $15tn by 2020, twice as much as in 2010, predicts Euromonitor, another market-research outfit. Much of this will go on leisure.

Yet the market has failed to respond to this opportunity, even though it has been clear for a long time that the baby-boomers would start to retire in larger numbers, in better health and with more money to spend than any previous generation. They feel much younger than their parents did at their age, and most of them have no intention of quietly retreating from the world. “Retirement used to be a brief period between cruise ships and wheelchairs, with a bout of norovirus,” says Joe Coughlin, who runs the AgeLab at the Massachusetts Institute of Technology. Now it has become a complete new stage of life, as long as childhood or mid-life, which boomers want to structure very differently; “yet we still offer my grandfather’s retirement.”

Over-60s adventure travel has become a booming business opportunity. In America more than 40% of adventure travellers are over 50, according to the Adventure Travel Trade Association. In Britain older travellers are the largest spenders in the industry, with the fastest growth in the 65-74 age group. Instead of comfortable cruises or bus tours, they demand action, from expeditions to the Arctic to cultural trips to Asia.

Jane Dettloff, a 73-year-old from Minnesota, has just returned from a two-week cycling tour in Chile. “The culture, the cuisine, the beaches and—oof—the Andes wine!” By day the 16 women, aged 61 to 87, pedalled, chatted and “felt like young girls again”. By night they enjoyed “wine-o’clock, without the whining about pills”. The travel company that organised the tour, VBT, does not explicitly bill itself as a specialist in senior travel, but offers subtle hints: “at your own pace”, “since 1971”, “good wine”. More than 90% of its customers are over 50.

Out of date

Another emerging market is dating. Whereas overall divorce rates are falling in some countries, including America, Australia and Britain, “silver splits” are soaring as new pensioners suddenly face the prospect of spending a lot more time with their partner. Americans over 60 are now getting divorced at twice the rate as they were in 1990, and Britons at three times the rate, write Lynda Gratton and Andrew Scott in “The 100-Year Life”. More than a quarter of the members of Match.com, a popular dating website, are between 53 and 72, and that group is growing faster than any other.

Older people seem more concerned than younger ones about the risks of online dating, prompting the setting up of specialised sites such as Stitch, an online companionship site with 85,000 members. “There’s more fun to be had after 50,” proclaims its promotional video, adding that “it’s all very safe.” Older customers seem more willing to pay for online memberships than the young, provided they add value. Stitch screens members and organises social events, explains Andrew Dowling, the co-founder. “Most people want companionship, but dating does change with age.”

Jody, from New Jersey, was inspired by her nieces, who all use dating apps, and ended up at a Stitch “drinks and mingling” event in a trendy New York bar. It turned out to be ten women sipping Margaritas, laughing as they swapped experiences of disastrous online dates and debating whether they would be more likely to meet a man if they went in for predominantly male activities such as mountain biking or golf.

Women spend more on trying to find a companion than men, because in the higher age groups there are more of them (in the rich world they live an average of five years longer), and they are more likely to be single. In 2014 nearly three-quarters of American men over 65 were married and only one in ten was widowed; of women in the same age group, under half were married and one in three was widowed. In Europe, too, women over 65 are more than twice as likely as men to be living alone. This can be problematic if they lack adequate savings, but also opens up new demand for all sorts of things that hardly anyone would have imagined a generation ago.

One is different sorts of accommodation. With longer time horizons ahead of them, the younger old are spurning lonely granny flats and looking for something more convivial, closer to a bachelor pad. “Retired golden girl seeks two cosmopolitan, easy-going, positive people with a (wacky) sense of humour to share this lovely, charming property,” starts an ad on goldengirlsnetwork.com, a single-senior housemate-finding website.

But businesses that want to get into this new market of the younger old should note that they are fussy. They do not see themselves as old, and will respond badly to ads specifically targeted at older people (as Crest found when it launched a toothpaste for the 50+ age group). The over-50s are also intolerant of websites or gadgets that underdeliver, says Martin Lock of Silversurfers.com, the largest over-50s community in Britain: “If something doesn’t work, they’ll be the first to leave.”

Between now and 2030, most of the growth in consumption in the developed world’s cities will come from the over-60s, according to McKinsey, a consultancy. So this is the market to go for; but to provide the wherewithal, the financial industry will first have to reinvent itself.