Hey big spenders! Over-50s are splashing out on home and lifestyle
Over 50s are continuing to spend on cars, home improvements and holidays, with the trend partly driven by retirement, a survey shows.
FT Adviser reports that Saga Personal Loans found that two thirds of those surveyed had major work done to their house since turning 50, while they typically take seven foreign holidays between the ages of 50 and 60.
Many respondents said they had noticed that more work needed doing to their homes since retirement, prompting a boom in spending on repairs and improvements. Typical over-50s spend £13,000 on a new kitchen and £5,000 on a new bathroom. People over 50 account for half Britain’s spend on motoring, with those in their seventies saying that they have bought an average of three new cars since turning 50.
While many over 50s pay for this through pension savings, others said they were using the equity in their homes or continuing to work for longer in order to fund their lifestyle. Some also said that they were taking out loans to pay for home improvement, cars and other spending. A recent study by Tilney found that the average household spent £893,500 after the age of 50, with £420,500 of this after the age of 65. As people get older a smaller percentage of their money is spent on housing costs and more on having fun, Tilney found.
Andy Cowan, head of Financial Planning at Tilney, said that the study showed that the top quarter of households spend nearly £3m in total, “much of which is when they are no longer working and can really enjoy the fruits of their labours”. “The key to enjoying a comfortable or even prosperous lifestyle in later life when you are no longer earning is, of course, to plan ahead and to start investing as early as possible,” he said.
However Nici Audhlam-Gardiner, managing director of Saga Money, pointed out that while new cars and home improvements are the key reasons people take out loans after 50, many people are denied a loan “because of arbitrary or income age limits requirements from lenders”.
(Article source: FT Adviser)