Older generation forecast to be biggest spenders by 2030: Citi

Older folk will be driving spending across the world, due in part to the wealth they have built up, a new report has noted.

It found that people aged between 45 and 65 across the globe are likely to lead the way when it comes to shelling out.

This group is expected to spend the most in advanced economies - including Singapore and Malaysia - by 2030, responsible for about 4 per cent of the anticipated rise in global spending.

Consumers aged 65 and above will clock the fastest rate of spending growth compared with other age groups in such economies, noted the report from Citi.

Aggregate global spending is expected to rise by $29 trillion in 2011 purchasing parity price-weighted terms to $95 trillion between last year and 2030, it added.

The older generation is driving consumption owing to its higher concentration of wealth in the form of financial and real estate assets.

More interestingly, the rise of consumption in the older generation coincides with a growing trend of baby boomers spending on experiences such as recreation and travel, said Citi.

Though media reports often suggest millennials are at the forefront of these trends, data shows that the older generation - broadly the baby boomers - has been a key driver of experiential commerce, said Citi.

Boomers spend around twice as much as millennials on experiences and almost 50 per cent more of their disposable income, it added.

Ms Nivindya Sharma, director of retail strategy and insights at WGSN Analytics, told the Citi researchers: "The narrative now is if you're healthy, go do whatever you want and you're not supposed to just be sitting there taking care of your grandchildren and children.

"So there's more freedom, there are more lifestyle choices that this consumer group can make and they will continue to do so."

Citi projects that people aged between 45 and 65 may spend more materially in the next decade, due to reduced poverty in larger emerging markets and the sheer number of older people.

Ms Carla Hassan, global chief brand officer at Citi, agreed: "(Older people) are living longer, have more disposable income and are really trying to live their life right there in the moment."

On the other hand, even though emerging markets - including Indonesia and Thailand - will continue to outspend advanced economies, the amount of spending by age group will become more varied over the next decade than in the previous one, said Citi.

Citi projects that people aged between 45 and 65 may spend more materially in the next decade, due to reduced poverty in larger emerging markets and the sheer number of older people.

Citi noted that India and Indonesia may see increases in spending among older workers "consistent with the global and emerging market trends", while the 15-to 30-year-olds in India and Indonesia may also "dramatically" increase spending, outpacing consumption by workers aged between 30 and 45.

THE BUSINESS TIMES

A version of this article appeared in the print edition of The Straits Times on January 15, 2020, with the headline 'Older generation forecast to be biggest spenders by 2030: Citi'. Print Edition | Subscribe