What are the over-60s doing with their money?

People are living longer and they’re asset-rich – when they have disposable income, how do they choose to spend it?

Spry Finance is the sole Irish provider of lifetime loans – loans for the over-60s secured on the value of their home. Its rigorous approach to understanding and meeting its customer needs provides a clear view of what its customers are intending to spend their money on.

The Spry Finance lifetime loan application process includes a question about the intended purpose of the loan – not because the company retains any control over the money once it’s lent, but to help assess the suitability of the lifetime loan product for the customer.  The answers provide real insight.

The top five reasons given by over-60s who apply for a lifetime loan (based on feedback from 594 customers) are1:

    1. Cash fund for lifestyle maintenance and ‘rainy days’
    2. Home improvements/purchases for the home
    3. Cars and holidays
    4. Re-financing loans and other debts (the conditions of a Spry lifetime loan stipulate that outstanding mortgages must be paid down on receipt of the loan amount)2
    5. Other (including gifts to family and friends)

John Moriarty, CEO of Spry Finance, believes that as people live longer – 14% of the population are now aged over-65 and there are 20,000 new over-65s in Ireland each year – their priorities and expectations are changing It’s quite possible that others’ expectations of them (the expectation of an inheritance, for example) are going to have to change as well.

“It’s fair to say that no-one feels the age they are – most people would say that they feel at least 10 years younger and as people live longer they’re realising that there’s a greater life in later life, right there for the taking,” Mr Moriarty said.

“This is reflected in the fact that our customers want to free up cash to have something put by for a rainy day, to improve their homes, to replace that car or take that holiday – more of our customers are telling us that, after two years of ‘Life Over Zoom’, they want to visit their families abroad.

“The over-60s are also keen to free themselves from lingering debt, or to give something to the family (while they’re there to see them enjoy it), but unfortunately, this age group are not well-served by traditional financial institutions.

“While they’re asset rich, they may be cash poor and this is where a lifetime loan is such a useful financial tool, allowing them to realise some of the value in their home, while still retaining ownership.”

Adding to the findings from Spry Finance’s customers, recent consumer research3 (based on feedback from 300 consumers) asked the over 60s (who haven’t applied for a lifetime loan but might consider it in the future) what they would use the money for. While the answers reflected Spry’s experience with its customers, there were some minor differences in their priorities.

45% of those questioned indicated they’d be setting up a ‘rainy day fund’, 43% would consider spending money on the holiday of a lifetime, 34% would use the cash for home improvements while others (28%) said they would use their funds specifically to help a family member buy a home.

1Based on feedback from 594 customers
2The conditions of a Spry lifetime loan stipulate that outstanding mortgages must be paid down on receipt of the loan amount
3B&A Research, over 60s, sample size 300, September 2022