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Will the pensions crisis effect consumer marketing?

Dick Stroud of 20plus30 marketing asks what effect the pensions crisis will have on consumer marketing.

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Is the pensions crisis going to become a marketing crisis or will it create marketing opportunities?

The Pension Commission’s report makes bleak reading for individuals and government alike. There are no easy choices: retire on a pittance, pay more tax, save more, work for longer. Whatever happens, one thing is certain: consumer spending patterns are going to change for the worse.

The Pension Commission’s long-awaited report is 600 pages of facts and analysis about two subjects that bore most marketers senseless - pensions and old people. Hidden amongst the numerous graphs and charts are conclusions critical to how the consumer marketing landscape will evolve during the next 20 years. Want to know what they are?

Pensions and how to pay for them is a complex subject, but the basic facts are simple and obvious. Fact number one: we are living longer. Fact number two: we are having less children. It doesn’t take a genius to deduce that fewer people working will have to support an increasing number of older people. The term ‘support’ doesn’t just mean paying pensions; it also includes providing health and residential care, both of which are expensive. This situation is not good, but it is only the start of the bad news.

Today’s pension position is pretty grim, with 50% of people with such low levels of savings and private pension that they are entitled to additional hand-outs from the state. If we look forward to 10 years’ time then today’s pensioners will appear wealthy. The picture in 30-40 years’ time is too horrible to consider.

With differing degrees of severity the rest of Europe, Japan and the US have similar problems.

All the solutions to the pensions crisis are nasty. It either means working longer, saving more money, starting to save money at an earlier age, paying more tax or most likely a combination of all four remedies. The Financial Times, not known for hyperbole, said: The traditional British penchant for muddling through has bequeathed a system that is incomprehensible, inequitable and inadequate.

Let me give you a feel for the magnitude of the problem. If pensioners are to remain as well off as they are today, and to retire at the same age, then the UK will need to spend an additional 8% of its GDP on pensions by 2050. So what’s 8% of GDP worth? Well, it is exactly the same amount of money as we currently spend on the NHS. A very, very large amount of money.

All the solutions have a common theme: money that would have been spent on consumption will be transferred by the individual, employer or government to pay for old age.

These macro-economic changes are going to have a very real impact on the marketing landscape. These are five obvious conclusions from the Pension Commission’s report.

To read this article in full, click on the attached article.

Dick Stroud is a marketing strategy consultant with a special interest in the business implications of demographic change.

To read his other articles visit

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