Rishi Sunak has pledged to halve inflation this year, but faces a challenge from the verygroup of core voters he hopes will keep him in office: baby boomers. Born in the postwar years between 1946 and 1964, and now aged 59 to 77 years old, boomers are contributing to stubbornly high inflation with their spending splurges. Armed with final-salary pensions or good jobs, and boosted by a rapid rise in interest rates on their nest eggs, millions of boomers are defying the wider economic gloom to keep spending. Last week, official figures showed annual inflation was stuck at 6.7% in September, unchanged from August, confounding expectations of a small fall. Sunak’s target to halve last year’s 10.7% rate by the end of 2023 looks in jeopardy. For many boomers, their healthy finances are the product of decades of economic good fortune, having benefited from free higher education, rising house prices, the right to buy policy, an expanding jobs market and the gold-plating of defined benefit pension schemes, giving them relative financial security as they become the older generation. The pensions triple lock, which guarantees an increase in line with whatever is highest among average earnings, inflation or 2.5%, has reinforced that financial safety net. However, ministers are mulling a one-off break from the pensions triple lock that could save £1bn, by preventing a bumper 8.5% increase in the state pension next year. Since interest rates started rising in 2021, hitting 5.25% in August, the Bank of England has indicated savings rates are likely to stay high for some time, boosting boomer spending well into 2024. According to the Resolution Foundation, boomers are the main beneficiaries of a new and unforeseen windfall – an estimated £90bn, the thinktank says, will be paid out over the coming year on £1.7tn of interest-bearing savings. The extent of the rise in buying power for those with savings was highlighted by a recent Nationwide offer of 8% interest on deposits for current account holders at the building society. Meanwhile, Santander and First Direct offer 7%, also to current account holders. Boomers, who comprise 13.14 million of the UK’s 67 million population according to the latest figures from the Office for National Statistics (ONS), are not the only group to have profited in the last year, while low- to middle-income families have seen their inflation-adjusted incomes stagnate or decline. Recent figures show City workers and senior commercial managers have enjoyed supercharged pay rises. Yet overall nationwide average spending across all age groups combined is down. And while there is only sketchy official data in the UK on the spending habits of different age groups, in the US, where surveys of spending habits go deeper, there is a boomer trend on view. Research by the Bank of America Institute found that in the year to May, household spending dipped 0.2%, but a generational breakdown revealed spending by the over-75s increased by 5% and by 2.5% for boomers. In contrast, and as a consequence of them being weighed down by student loans repayments, spending by gen Zs (born in the late 1990s and early 00s) fell by 2%. Here, through official data and business surveys, we highlight how boomers are playing a significant role propping up several areas of the economy – and helping keep inflation stubbornly high. Housebuying The UK’s housing market is picking up after a difficult year marked by falling prices and a low level of transactions. Figures from the ONS found there was a drop in estate agency activities by 0.01% in the first quarter and 0.03% in the three months to the end of June. A tentative recovery may be under way after the average UK house price rose 0.2% to £291,000 in August, creeping back to the peak in November 2022 of £292,187. First-home buyers are a rarity and the market is being driven by the over-50s. Property data company Outra says the average age of homeowners tipped to move house in the next six months has increased by 3.5 years since 2022, to 52.5 years of age. The majority of movers also possess large deposits, with most having at least £250,000 in stored equity in their homes, according to the company’s pre-mover index, indicating the majority of buyers will be much older and wealthier than the average home buyer. “The UK’s housing market is now the preserve of the old and rich. There’s a real danger that what this trend indicates is the start of an inheritocracy,” says Outra founder Giles Mackay. Holidays Ryanair is on course to make record profits after a surge in bookings for flights and holidays this summer. Winter getaways are also booking fast. According to official data, the number of people going abroad on holiday remains below pre-pandemic levels, but the money spent is at record highs. Some of that is accounted for by higher air fares that deny many millennials – those born between 1981 and 1996 – the cheap prices they once relied on for short-haul weekend breaks. After the pandemic lockdowns, the fashion for more expensive, bucket-list holidays is another reason. Saga, the business that caters for the over-50s, found that 15.8 million travellers took on average 3.3 trips a year, or 52m holidays, according to its interim report published in September 2022. In addition, research has shown that two-thirds of these over-50s said they were planning to take between two and four holidays in 2023. A quarter said that they planned to take five or more trips this year. The majority (55%) of respondents said that the cost of living crisis “has not affected their holiday plans”, while 14% said they were planning to spend more than £5,000 a person on their main holiday. Saga’s data shows holidaymaker numbers are up 17.1% this year on last year and the top long-haul destinations are the US, Canada and Australia, while short-haul favourites include France, mainland Spain and Italy. The Guernsey-based ferry operator Condor said 82% of boomers planned to take between one and five trips “for fun” in 2022. Anecdotally, trips have tended to become “longer and more far afield”, according to one travel expert, with those taking cruises forking out for journeys to the Caribbean or the Nordics rather than round-Britain cruising. Golf The sport is the archetypal boomer leisure pursuit. In 2019, there were almost 13.5m rounds of golf played in the UK, according to data provider GolfNow. The onset of the pandemic sent that figure soaring to 22.2m in 2020 and since then it has only become more popular. Last year, the figure hit 24.7m and this year it looks like going even higher after record-breaking totals in most months in 2023. Looking at the percentages, the biggest gains since 2019 come from the younger 18- to 24-year-olds, who took up golf as an outdoor pursuit in the pandemic and have continued playing. But golf memberships are still dominated by older groups and especially the over-55s. GolfNow says the over-55s age group accounts for 32.2% of memberships to its BRS Golf tee booking site and the 45- to 54-year-olds add another 19.4%, while the under-35s comprise a further 29%. Recreation and culture According to ONS consumer trends data, the recreation and culture industry staged a dramatic recovery in the first half of this year, when many others, including transport, continued to suffer aftershocks from the pandemic. Within the consumer trends data is a family spending survey that has a breakdown of spending by age. It shows that consumers aged 75 and above and those aged 50 to 64 and over spent more on alcoholic drinks and tobacco (plus narcotics) than the under-30s. The most recent data with an age breakdown, for the year to March 2022, shows the top 60% of pensioner households by income – those aged 65 to 74 – spent more than the average household (covering all age groups) on recreation and culture, which includes a wide range of activities, from cinema and theatregoing to buying gardening tools and newspapers, books and package holidays. While the average household spent £56.10 a week on recreation and culture, the top 20% of those aged 65 to 74 spent £99.90 and the top 60% spent an average £88.87 a week, ONS figures show. The top 40% of pensioner households by income – those aged 65 to 74 – also outspend other age groups on clothing and footwear. Private healthcare A severe strain on state healthcare services over the last three years has made private health attractive for those who can afford it. After a dip in the first half of 2020, when the pandemic prompted a rush to NHS services, the number of admissions to private healthcare hospitals and clinics has jumped from 176,000 in the second half of 2020 to 227,000 this year. Consumer spending on health rose 14% in the first quarter of 2023 compared with the previous year, outstripped only by housing (15%) and tourism (71%), according to official figures compiled by data provider GlobalData. Figures from the Private Healthcare Information Network, which tracks admissions, show a sharp rise across most age groups between 2022 and this year, but the bulk of them have come from the 55-80 age group.