Spending on the rise: Boomers to the rescue!

No news is good news, so they say. And since the onset of the pandemic, that’s been more a truism than a proverb.

COVID, rising interest rates, cost-of-living spikes, toilet paper shortages – it’s been a seemingly endless list of bad news. All of this bad news has led to Australians spending less, creating further economic gloom.

But amongst all that doom and gloom is a sliver of hope. There are signs that one group of Aussies has taken the first steps towards a financial recovery. And it’s us – the over-50s.

The potential good news comes from what is generally painted as bad news – higher interest rates. Higher interest rates are, of course, not great news for those with a mortgage. But there are two sides to every story. Those with investments will benefit from interest rate increases. And the over-50s make up a solid proportion of them.

Increased returns on investment can mean more money to spend. And more spending could help Australia bounce back in economic terms.

The good news is that there is data coming out suggesting Aussies over 50 are doing just that – spending more. According to business journalist John Beveridge, the latest Commonwealth Bank profit results contain a couple of nuggets of spending-habits gold.

Mr Beveridge unearthed numbers from among Commonwealth’s 15.9 million customers showing spending was up by nearly 5 per cent for those aged between 55 and 64.

For the over-65 age group, the increase was even stronger – 6.4 per cent compared to the previous year.

Boomers are spending big and saving big

Mr Beveridge contends that, while inflated prices have been a factor in increased spending, so has greater market confidence. That confidence is coming from earning much better interest returns on savings as rates rose to try to reduce inflation.

The result has been simultaneously greater spending and greater savings for older Australians, something rarely seen in times of low interest.

There is also evidence that older Australians are returning to travel as a leisure activity. So far this has been a boon for European and Asian tourist destinations, but that boon might soon come home.

The Australian dollar is trending downward, which in turn makes overseas travel more expensive. But with pre-retirees and retirees showing a renewed hunger for travel holidays, the rising cost of overseas travel could see a greater focus on domestic sojourns as a result.

One other important factor is that almost seven million Australians are aged over 55. These are big enough numbers to keep the economy growing and to boost employment among younger generations.

So the next time you hear of the older Australians being the root of our country’s ills, remember this news.

Tell the doomers and gloomers not to blame the boomers. Because, if the early numbers are on the mark, it’s older Aussies who are leading our economic recovery!

As an older Australian, have you benefitted from higher interest rates? Do you feel confident in spending more? Let us know via the comments section below.

Also read: Worst of inflation and interest rates behind us, say CEOs

Andrew Gigacz
Andrew Gigaczhttps://www.patreon.com/AndrewGigacz
Andrew has developed knowledge of the retirement landscape, including retirement income and government entitlements, as well as issues affecting older Australians moving into or living in retirement. He's an accomplished writer with a passion for health and human stories.
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