living to 100
DESCRIPTION
A dramatic increase in life expectancy across the globe presents major opportunities for brands and businesses – a new market that can drive serious growth into the future.TRANSCRIPT
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The new frontier
is time itself...
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The new frontier
is time itself...
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Living to 100Throughout history, people have investigated the limits of the possible. As societies have developed and expanded, new frontiers have been encountered, contemplated and explored.
From the opening up of the Spice Routes to the Industrial Revolution, the globalisation of the 20th century to the ever-changing technologies of today, these previously unexplored territories have presented challenges but also great possibilities for those willing to take advantage of them.
> In developed markets, life expectancy increases by 6 hours every single day1.
> The majority of children born today will live to the age of 100 or more2.1 / Colin Blakemore, MRC Chief Executive at a Royal Institution Lecture 20102 / Christensen, Dulhammer, Rau and Vaupal, Lancet 2009
> This represents a 25% increase in the duration of our lives; that’s 25% more time to eat, drink, read, communicate, travel, socialise – the possibilities are endless. It represents enormous potential for almost every business.
> By 2030 there will be 1.2 billion people over the age of 60 worldwide3.
> They have the money: over 80% of wealth in Britain is held by the over-50s4. 3 / Colin Blakemore, MRC Chief Executive at a Royal Institution Lecture 20094 / Pat McFadden, MP, BIS: 80% of national wealth and 40% of annual consumer spending is accounted for by people over the age of 50
1. Already this
represents a huge
market; the post-WWII
baby boomers started
qualifying for their
pensions this year!
2. This population
is only going to get
bigger, and as life
expectancy increases,
the potential market grows in
tandem with it.
3. Actions taken
today make a real
difference: studies
show that our quality
of life in later years is
significantly influenced
by choices taken
decades earlier.
A dramatic increase in life expectancy across the globe presents major opportunities for brands and businesses – a new market that can drive serious growth into the future.
This matters right now because:
Clear has conducted the first major international study of the impact of living to 100. Using qualitative and quantitative research, we have explored the implications across China, the United States, the UK and the Netherlands, interviewing more than 3,000 people to identify key attitudes, insights and opportunities. Now, the new frontier is time itself.
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The Big Insights
Consumers don’t have aPLAN B
In China
we save for the
wider family unit
rather than the individual
One lifestage
at a time..people tend to look to
the near future only
A healthy mind is at least as important as a healthy body
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Help Me Imagine We struggle to imagine our own futures. Today’s youth are somewhat oblivious, with only 2% of 16-24 year olds believing that they will live to be 100, but current forecasts suggest that almost half of them will do so1. Most people still expect to retire at the same age as their parents, when the reality is likely to be very different.
Governments are reluctant to discuss these changes because of the political sensitivities involved. Without guidance, people lose sight of the long-term picture.
In fact, almost half of all adults only ever contemplate one life stage ahead2. But where politicians fear to tread, there are opportunities for brands to create compelling and inspiring visions of the future, informing consumers, helping them to take control of their destinies.
Making it EasyWe aren’t preparing ourselves adequately for a longer life. We know it too: half of us worry that we’re not providing enough for our long-term futures3. And while more than two-thirds of people are willing to make sacrifices today for their future45, most of them don’t do so. Why is this?
Well perhaps because it’s confusing, complicated and uncertain.
An astonishing 62% of people in the UK say that they have no idea how much money they will need in retirement. “I don’t know what I would do if I suddenly needed a big operation like a heart bypass”.
Pension companies can show what your income is likely to be, but make no predictions about your necessary outgoings. Planning for the future is based on the needs of today, not those of tomorrow.
Saving lacks the instant gratification of spending but can deliver comfort and security to the individual. A prosperous future awaits companies that can truly join forces with their customers to provide them with guidance, transparency and support in this area, and a real incentive to plan for their future.
1 / Some countries are confronting the implications of this more than others: ‘Taking into account your health and the age your parents and grandparents lived to, what age do you expect to live to?’ 2% of 16-24 years olds believe they will live to 100 or older; 5% of American 16-24 year olds and 2% of NL 16-24 year olds. Life expectancy increases by 4 months per year. Current average life expectancy in developed markets is around 80, according to CIA Fact book 2009 and the UN. If trends continue, in 60 years’ time the average 80 year old could expect to live to 95.
2 / Top two box agreement that ‘When I do plan for the future it’s about the next life-stage on for me, not the longer term’: 41% UK; 35% US; 49% NL – Clear study 2010.
3 / 49% of people in the USA; 43% of people in the UK; but just 16% in NL.
4 / ‘I am not prepared to make sacrifices today for something that I may or may not benefit from in the future’: 30% UK; 25% US; 40% NL. Less than 25% of people believe that the state will look after them in later years – this decreases to just 10% in the US.
5 / This picture is very different in China, where people are more aware of the challenges and needs of older life stages – many people live in extended family settings with older generations, making old-age more familiar. An example of this more ‘collective’ perspective on aging can be seen in saving behaviour in China. It is typical for working adults to save 30-40% of their salary for the future, but these savings are for the wider family unit rather than the individual.
Work With MeThere is a huge gap between people’s words and their actions when it comes to employing the elderly. In Britain, 8 out of 10 people believe that older people have a lot to contribute through their wisdom and experience6, yet up to half of those who retire before the age of 65 say they were forced out of their job7. But it’s our loss.
The UK Government estimates that ageism in the workplace may cost as much as £31 billion a year in lost GDP8. At a time when the West is, in theory, shifting to a knowledge-based economy, the education, insight and experiences of many older people are being squandered.
And what’s worse is the elderly actually want to participate in the labour market, with 73% of Americans expecting to actively work after retirement9. We know that the elderly want to work, we need them to work and they undeniably have a lot to contribute. So it’s time to reconsider our careers: how we work and for how long. Don’t worry, it doesn’t mean a future of working until we drop; the good news is that some academics believe that flexible working practices mean that “the average amount of work per year of life could stay about the same as it is at present”10.
All of this suggests that there are tidy profits to be made by enlightened companies that can reorganise current practices to access the untapped wisdom of the elders!
6 / ‘Older people have a lot to contribute through their wisdom and experience’: 79% UK; 87% USA; 72% NL.
7 / A 2002 survey found that 50% of men and 40% of women who retire before State Pension age say they were ‘forced’ out of work. Humphrey, A. et al. (2003) ‘Factors affecting the labour market participation of older workers’. Department for Work and Pensions Research Report No 200 in Building a Society for All Ages, Secretary for State for Work and Pensions, July 2009.
8 / Together the drop in work rates among men over 50 and ageism in the workplace is estimated to have cost the economy between £16 billion and £31 billion per year in lost GDP. Cabinet Office (2000) Winning the Generation Game. Employers’ Forum on Age (2001). Ageism too costly to ignore. Age Concern England (2004) The Economic Contribution of Older People- in Building a Society for All Ages, Secretary for State for Work and Pensions, July 2009.
9 / Clear Study 2010: 50% in UK and 47% in NL.
10 / Christensen, Dulhammer, Rau and Vaupal - Lancet 2009.
of people in the UK do not know how much they need to save for retirement
62%
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A Long Life AND a Good LifeUnderstandably, quality of life – not quantity – is what people care about most: two out of three people only want to live longer if they are happy with their quality of life1.
“Only if it’s sociable and fun...not if it’s sitting in a chair all day with a blanket wrapped around my legs”…“it’s not about living longer at any cost”.Businesses that focus on maintaining and enhancing this quality of life in old age are the ones that will thrive in this market. And quality of life is not just a matter a health; it’s strongly influenced by how people feel about themselves too. There are opportunities for clothing, cosmetic and beauty companies, just as there are for the technology, drug and food industries.
We All Just Want to Have FunContrary to stereotypes, old age is not a slow fade into oblivion!
According to forecasts, these extra years are likely to be healthy ones, and most people look forward to a retirement of fun, passion and discovery2. But historically speaking, consumer marketing has focused on the young. Companies that can understand the over-60s, that are capable of anticipating and catering to their needs, providing appropriate entertainment, travel and communication experiences, will be the ones that can maximise their share of this valuable senior market.
1 / ‘I would only want to live longer if I could be guaranteed a decent quality of life’: 70% in UK; 67% US; 66% NL.
2 / ‘I expect to enjoy old age. I don’t fear it’: UK 55%; US 65%; NL 70%. ’I expect to actively participate in hobbies or interests in my later years’: UK 83%; US 90%; NL 76%.
of Americans expect to work after retirement
73%people aged
over 60
By 2030 there will be more than
1.2 bn
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Match the MindsetWe have found some very different perspectives on the idea of living to 100, with four key mindsets emerging. Designing products and experiences to target these attitudes will help brands to connect with people more powerfully.
People who are engaged
and enlightened about the
realities of living longer and
ageing, but who are also
motivated by the prospect of an
active rather than a leisurely
retirement tend to be older
people with higher incomes
who can be characterised by
their sense of responsibility.
“Once you stop challenging
yourself there is nothing to
live for”. We see stronger
representation of this in
the West than in China.
How to win with them
Provide tools and services that
empower them by giving them
control. Create new working
practices and environments
to maximise their ambitions
and experiences. Travel
is a big focus for them.
HARD REALITY
MAKING THE
MOST
People who are as informed about the realities of living longer and ageing as the first group, but who are strongly motivated by the prospect of an easier life in retirement. Their focus therefore is on making the most of the assets they already have (for example,
downsizing the family home, etc.). These also tend to be older people, but this mindset is less strongly correlated with higher incomes. While this attitude is the norm in China, it is also very prevalent in the West.
How to win with them
Provide flexibility and inspiration.
HERE AND
NOW
People who are far less engaged with the realities of living longer and ageing, but are motivated by the prospect of staying active and achieving rather than ‘working to live’.These consumers are often at the family stage of life.
While they are driven to achieve, their primary focus in the here and now is on the well-being of their children and family.
How to win with them
Educate and inform them about what their personal future is likely to be and what this means for them and their family. Make it personal and intuitive.
LIVING FOR
TODAY
Also far less engaged with the realities of living longer and ageing, these people are nevertheless strongly motivated by the idea of an easier life after retirement. These tend to be our youngest people, currently focused on making the most of their youth, expressing themselves and
experiencing the freedoms of pre-family life. Very few of them are able to see beyond the immediate future with any sense of clarity.
How to win with them
Paint a vivid picture of the future and how today’s choices can shape it. Make it enjoyable and simple to plan and act.
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The 4 Big Opportunities for Brands & Businesses
RedefineSimplifyInspire Enable
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1|Redefine ageingIf we approach ageing from a positive and proactive perspective, we can bring a new identity to retirement and a sense of purpose to this later phase of life.
> As we have seen, 80% of national wealth and 40% of annual consumer spending is currently accounted for by people over the age of 501. This market will continue to grow, strengthening the influence and potential of this section of society.
> 73% of Americans expect to work after retirement.
> In 1999 the working population amounted to 47.8% of the total UK population. By 2030 it will be 44.5%, a potential shortfall of two million workers2.
> Consumers are adamant that they would change their behaviour if they knew that their health was at serious risk. The opportunity for pro-active health services is almost limitless in a world in which the effects of our inherited genes and the impact of our lifestyles and environments become clearer every day.
> “Very long lives are not the distant privilege of remote future generations – very long lives are the probable destiny of most people alive now in developed countries3.”
> We need to re-imagine the traditional role and style of old people’s homes. In the United States today one million people live in retirement villages4. Voluntary clubs and associations that promote choice and independence and that are reflective of the realities of older people’s lives now may be a better model for the future.
1 / Pat McFadden, MP, BIS.
2 / BBC News (Source: Government Actuary’s Department)
3 / Christensen, Dulhammer, Rau and Vaupal - Lancet 2009
4 / A Golden Age, Times Retirement Supplement 21.02.10
Healthcare > Building products and brands that help to
maintain and enhance quality of life.
> Positioning and communication that focuses on products with fewer side-effects.
> Greater demand for products and services that help in managing dementia – could it be the new cancer?
> Global hospice services and brands.
Technology > Networked wisdom – applications that enable
people to make more use of their experience and insight by sharing it at the right place and time.
> Communication experiences targeting the elderly – combinations of services and recognition of their needs.
FMCG > Food and drink that helps people to maintain
and proactively manage their health. Going beyond cholesterol into mental stimulation.
> Similar breakthroughs in old-age skincare management.
Financial Services > Introducing the Life Mortgage – take a 10-year
holiday now, pay it off over the next 40 years.
Government and Society > Changes in employment law to encourage more
flexible working hours and part-time working.
> Inter-generational job shares.
> Reinvention of the pension incentive and a shift in state pension age.
> A Grey Party – government of the pensioners, for the pensioners by the pensioners.
What this could mean for:
Why is it a big opportunity?
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2|Simplify living to 100There is a big opportunity to simplify the process of planning and living to 100.
> Only 10% of people over the age of 75 and 35% of those over 65 are connected to the internet and know how to use it1.
> People don’t trust pensions! Many have seen their savings eroded by the economic downturn (with the exception of the public sector). In China pensions are rare; instead people invest in stocks and shares. There is a great need for impartial advice. People have little awareness of how to plan their financial future. Very few people know how much they will need and what their costs will be down the line. They have no idea of what they should be saving per month to ensure a secure future.
> 49% of people in the USA and 43% of people in the UK are worried that they haven’t saved enough for their future.
1 / (http://www.ofcom.org.uk/advice/media_literacy/medlitpub/medlitpubrss/ml_adult08/Building a Society for All Ages, Secretary for State for Work and Pensions, July 2009.
Healthcare > Stepwise health plans.
> Holistic MOTs that combine intuitive health and wealth assessments and forecasts. Help people to see and imagine what their future quality of life is projected to look like. Think Honey, We’re Killing the Kids – think genetically-based BUPA MOT and IFA assessment all in one.
> A chain of specialist geriatric care health clinics with tied insurance products to facilitate access.
Financial Services > Services that offer a transparent and
intelligible forecast of the cost of living.
> Passing it on – Inheritable rewards points.
Technology > Products designed by occupational therapists.
> Simplified, stripped-out products without all the bells and whistles.
FMCG > Washing and bathing products that make
it easier to clean elderly bodies.
> Beauty and cosmetics specially created for over-60s’ skin.
What this could mean for:
Why is it a big opportunity?
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3| Inspire People with the Potential of Living to 100
There is a big opportunity to create exciting and life-affirming ideas that help the older population to live richer, more enjoyable lives.
> Only 2% of 16 to 24 year olds believe that they will live to be 100, and yet forecasts suggest that almost half of them will1. Most people still expect to retire at about the same age as their parents did.
> Almost half of all adults only consider the future one life stage ahead2.
> Today’s children will enjoy living 25% longer – that’s 25% more life to be lived!
> Disability-free life expectancy is called Healthy Life Years – these are rising in parallel with life expectancy.
1 / Some countries are confronting the implications of this more than others: Taking into account your health and the age your parents and grandparents lived to, what age do you expect to live to? 2% of 16-24 years olds believe they will live to 100 or older; 5% of American 16-24 year olds and 2% of NL 16-24 year olds. Life expectancy increases by 4 months per year. Current average life expectancy in developed markets is around 80 according to the CIA Fact book 2009 and the UN. In 60 years’ time the average 80 year old could expect to live to 95 if trends continue.
2 / Top two box agreement that when I do plan for the future it’s about the next life-stage on for me, not the longer term: 41% UK; 35% US; 49% NL – Clear study 2010.
Healthcare > Make 90 the new 60. Plastic surgery for people aged 80+.
Mainstream specialised clinics for the bits that go wrong!
> Combined health spas and medical clinics that target the over-60s.
> OTC products and nutraceuticals that help keep deterioration at bay.
> Shoe design to aid posture and help avoid the onset of future back problems.
Technology > Gaming products for the elderly that
enable a wider community to easily connect and play – global bridge tournaments!
> Role for home-based hobbies and socialising – social networking sites/audio books, virtual ‘walk around the block’ games.
> New magazine and media content through targeted TV, radio and web channels.
Government and Society > Gardening Co-op (most elderly people can
see themselves gardening to stay active and fit). Monetising this could be considered.
> Designing homes of the future around the needs of a less mobile generation, while still providing them with independence.
> New communities where the elderly are encouraged to play an active role in childcare, education, etc.
> Specialised job sites and centres for retirees, giving advice on suitable jobs or ways to turn hobbies into businesses.
> Help me to give back – volunteer/charity tax-credits. The more you volunteer, the less tax you pay on any income you receive when you are over retirement age.
> Provide new places and spaces – pubs, libraries, community centres designed for older people with specific services –audio books, fast track services, etc.
What this could mean for:
Why is it a big opportunity?
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> Not just an indispensable part of the family unit, the role of grandparents in informal childcare has been valued at £3.9 billion each year1.
> An estimated 5,000 new businesses start life in a garden shed or at a kitchen table every week and an increasing number of those are by people aged over 50 years2.
> The over-65s own £1.1 trillion of housing equity in the UK (a quarter of the value of the housing market)3.
> Over-65s account for around a third of all those carers providing more than 50 hours of care a week4.
> Jitterbug is a mobile phone and network provider that has targeted the baby boomer generation with easier to use products and customer service – they have grown from 4 to over 500 staff in just four years.
> Social lives unravel over time, provoking significant fears of being lonely or alienated. In western culture in particular it is important to maintain social ties because they are ‘an investment in the future’. Companionship will be extremely important in our later years but will perhaps take on a new definition.
1 / Cabinet office and Department for Children, Schools and Families in Building a Society for All Ages, Secretary for State for Work and Pensions, July 2009.
2 / Jam Today…, Times Retirement Supplement, 21.02.10.
3 / Richard Donnell, head of property analysts, Hometrack, Permanent Vacation, Times Retirement Supplement, 21.02.10.
4 / ONS, 2001 in Building a Society For All Ages, Secretary for State for Work and Pensions, July 2009.
4|Enable People to Achieve More When Living to 100
There is a big opportunity in making the ageing process easier by simply providing the products and services that enable older people to live fuller lives and maintain their status as productive members of society.
Healthcare > At-home diagnostics and remote monitoring.
Financial Services > A bank for elderly entrepreneurs.
> SME banking is a strong theme in China – helping the individual borrow money where currently entrepreneurship relies on personal savings.
FMCG > Packaging that is – in reality! – easy to open.
> Food and drink that takes care of the mind: from gingko to chicken essence.
> Household cleaning products that maintain cleanliness for longer.
> New methods of researching ideas with the elderly.
> Growth in pet care and associated training services – companions for old age.
Leisure, Government and Society
> Estate agents for the over-50s.
> Increased investment in initiatives and regulations to tackle factors that add to the cost of old age: obesity, smoking, lack of exercise, processed foods. Opportunities for private companies to provide services in these areas.
> New ways to fit exercise into daily regime – aqua aerobics, building on the Wii Fit – virtual exercise, etc.
> Second Life employment agencies, serving only the over-50s.
> University campuses designed for the comfort and needs of the over-60s.
What this could mean for:
Why is it a big opportunity?
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