With generous pension schemes and an ever-increasing life-expectancy, Britain's current generation of retired executives have money to burn and time on their hands to spend it. No wonder businesses are fighting to win their custom. But the silver rush won't last for ever, says Jim White
It is a sweet irony that those who are old enough to remember Macmillan's famous 'You've never had it so good' sentiment are precisely those members of British society who are still having the best time of it. Over-fifties now account for nearly 40% of the population and, interestingly, people in the 50 to 59 age group are known in the media-buying trade as 'thrivers'.
The UN estimates that by 2025 there will be another six million of them in the UK, and a whopping 39 million more across Europe. They are often earning well and, being avid listeners of Radio 4's Money Box, they have PEPs, Tessas and ISAs coming out of their ears. Their houses are nearly paid for and costly children have mostly left the nest. No wonder they appeal to the marketers, who are coining expressions like 'Woof' (well-off older folk) to describe the sector.
Eighty per cent of the UK's wealth is held by these silver-surfing over-50s, and those who have grey pounds are spending them in abundance. If you're a senior citizen these days, chances are you won't need to use your bus pass. Half of all new cars are sold to the over-50s, and eight out of 10 luxury cars are snapped up by relative oldsters. Models like the Ford Focus were designed expressly with older customers in mind, testers going so far as to simulate the effects of age with artificial cataracts in the pursuit of a larger slice of the 'mature' market.
Saga, which celebrated its own 50th birthday last year, has used the grey pound to build a powerful web of businesses across a wide range of sectors, from travel to home, motor and pet insurance and even its own radio station - all positioned to appeal to the company's growing band of affluent mature customers. But it isn't the only one. Banks, healthcare companies, travel agents ... even your local high street steakhouse is trying to tap the Woof market. Whitbread's Emerald Club is open only to over-55s and offers discount weekday lunches in its Beefeater and Out and Out restaurants.
It's hugely popular, with more than 1.5 million members regularly tucking in to dishes like breaded mushrooms, rump steak and chocolate fudge sundae, all for about pounds 8 a head. JD Wetherspoon's operates a similar scheme. Even Guinness, with its stylish black and white 'swimmer' ad by top agency AMV.BBDO, has started acknowledging and wooing the older drinker.
But this golden age of the grey pound won't last. The biggest cloud on its horizon is the inability or unwillingness of companies to finance generous pension schemes for their retired staff. One by one, the big names are announcing that the 'final salary' pension scheme is no longer on offer.
For the already retired, though, the gravy train rolls on. Just down the coast from Felixstowe in Suffolk, overlooking the flat, grey North Sea, can be found a paradigm of cosy contentment. About 500 retired people, dressed all in white, are gathered in a vast indoor arena playing bowls. The only sound echoing through the place is an occasional ripple of polite applause as balls clack on jacks. This is Potters Leisure Resort, self-styled international mecca of bowling, where the richest generation of Britons of all time come to play.
'Potters is built entirely on repeat business,' says John Potter, the resort's managing director and grandson of the man who built a holiday camp out of a few disused army barracks on the site in the 1930s. 'Most of our clients will take three, four, maybe five holidays a year. And many may well come here more than once a year. You can safely say most of them have plenty of disposable income.'
A quick look at the car park, full of gleaming, freshly registered new cars, confirms that these are Britons keen on enjoying the fruits of their working lives now that they have finished. The place oozes the sort of services demanded by a discerning market with plenty of cash to spend. This is the grey pound at work.
'We don't call it the grey pound,' says Potter, smiling at the thought of all those singing tills. 'We prefer to call it the silver dollar.'
But there are those who wonder if the prospect of a financially secure future of endless leisure obtains for the present generation of British managers. According to Richard Worsley, director of the Tomorrow Project, a futurology think-tank that has the Government's ear, the chances of 40-year-olds - now working the longest hours in Europe and heading for their first ulcer - enjoying a Potters-style future are frankly zero. 'The whole scope of how we take time out of our working lives needs to be examined,' he says. 'Life expectancy is growing and the idea of taking 15 or so years off at the end of it is becoming a nonsense.'
Worsley's organisation uses expressions like time-bomb to describe the demographic shift that will jerk the rug from under those hoping to slip into a contented third age of non-stop consumption. The figures make stark reading. With the birth rate falling like a stone, by 2020 half the adults in Britain will be over 50. Put simply, this means there will not be enough productive workers around to keep the swollen ranks of future pensioners in the style to which the present grey market has grown accustomed.
What's more, there will be a lot more life to finance. In 1940, the average man would need the services of an undertaker in his forties; yet 60 years on, he can expect to live to 75. And that average is heading towards the ton by the year.
The sad news for the generation sweating at the office coalface to keep their parents in Potters away-breaks is this: there's a real chance that no-one will be doing the same for them; they'll be obliged to work till they drop. And although the implications of an ageing population seep into every part of our social structure, few have made adjustments in the way they go about their business.
'At the moment I don't see any evidence of industry and business as a whole making any preparation for the necessary change,' says Andrew Vallance Owen, BUPA's medical director. 'But they are going to have to start thinking now.'
And it is not just demographics that has sown a seed of alarm in the stomachs of the working many. For years the Sunday newspaper supplements have been packed with articles insisting on the need for forward financial planning. As it becomes ever clearer that no-one can rely on a state pension if they expect to live above the breadline, as companies take lengthy payment holidays from their pension schemes, and as the chances of receiving a chunky index-linked pension for life sink southwards, we have been told to make provision for ourselves. Graphs showing how a man in his twenties needs to be squirreling at least 15% of his income away in a personal pension fund have been a weekend regular for years. The tone of articles throughout the '80s and '90s was: leave it until you're 40 and you're in big trouble. But in the past couple of years it has become clear that those prudently following such advice might as well have taken their cash down to the bookies and put the lot on the favourite in the 3 o'clock at Market Rasen. Mis-selling scandals, the calamity of Equitable Life and a stock market slump have all contributed to a sense of jittery uncertainty.
Even those in copper-bottomed, blue-chip schemes have seen their annual statements take on an increasingly gloomy tone. Never mind three breaks a year at Potters, most personal pensions will barely cover the fee for a game of bowls. Economic necessity means that most people will need to keep working, if not like Jimmy Young into their eighties, then at least until they are 70.
'There are real opportunities in organisations to re-think the way they recruit,' says BUPA's Vallance Owen. 'Take nursing. There is a huge shortage of nurses. Yet there is also a huge body of post-child-bearing trained women who could be called back into the service. The trouble with so much recruitment policy in Britain is the assumption that by the time you reach 45 you are finished.'
Indeed, the whole system of industrial recruitment is predicated on older workers getting off the treadmill to make way for the next generation. But with declining numbers coming into the labour market, and those in it reluctant to leave, business will have to rethink that approach. 'It is as much about attitudes and perceptions as ability,' says Vallance Owen.
One aspect that isn't dependent on perception is health. Older workers are, quite obviously, more prone to stresses and strains. And the big increase in the chronic ailments of affluence - heart disease, diabetes, strokes - means that companies may well be reluctant to take on anyone who risks being on the sick list for long.
'Companies are going to have to think much more about occupational health - not just smoking issues, good food in the canteen and encouraging staff to take exercise, but regular and thorough examinations,' predicts Vallance Owen. 'Any company that wants to get the most out of its resources needs to think about keeping its staff productive.'
There is a mental health issue here too. The willing older worker would prove a boon, but the reluctant ones, forced into employ- ment by the prospect of penury, are quite another thing. And it seems most of us will fall into the latter category. 'We did a survey about this recently,' says Vallance Owen. 'And 73% of those questioned said they would be unhappy working until they were 70.'
Health has another striking influence on the nation's chances of enjoying a wealthy retirement. The downside to living longer is that there is a significantly increased chance of a period of infirmity at the end. With family units breaking down, fewer and fewer old people will be able to rely on their relatives for help in these circumstances. With sheltered accommodation and accompanying nursing care costing upwards of pounds 400 a week - far more in the south-east - savings can be wiped out in a matter of months. According to recent figures, more than 50,000 Britons a year are selling their homes in order to finance nursing care. This has a two-fold effect on the next generation of the retired. Not only will they need money longer, but they will watch as the current retirees - the first generation to benefit from inheriting their parents' property - spend any inheritance they might pass on on healthcare. Mind you, where there's a crisis, there's a marketing opportunity: one of the biggest growth areas in financial services last year was in care planning, a sort of end-of-life insurance.
Whatever happens, things are going to change. For years we have been programmed to expect an end to our working life some time in our sixties, earlier if we are lucky. And we have been brought up to expect that such an end will not consist of slippers and episodes of Countdown, but a seemingly endless holiday of freedom and leisure.
One of the greatest corporate success stories of the past 25 years has been built on providing for this long Indian summer. Yet when it was approached to discuss the future of the grey pound for this article, Saga, the business that cunningly convinced its clients that they were still in their prime by putting Mick Jagger on the front of the company magazine, put an x in the no-publicity box. Presumably it does not want attention drawn to its greatest corporate fear: that its business is based on a passing trend.
Now that futurologists are predicting a pattern of working life like this - graft until you are too infirm to go on in order to pay for many years of nursing help - we might look back on the past two decades of exponential growth in the grey market not as a permanent condition but as something transient.
'In the Victorian age, the concept of retirement didn't exist,' says Worsley at the Tomorrow Project. 'And there's no guarantee it will continue to do so in the future.'
This present generation of retirees is the first in history to see its bank accounts swollen by the happy combination of inherited property wealth and years of stock market growth. Maybe in 50 years' time, when we look back at these times and at the companies that sprung up around them to exploit that wealth, we'll realise it wasn't the grey pound after all. It was a latter-day silver rush.