Dominant Patterns of Expenditure Among Older People in the United Kingdom: Segmenting the Older Consumer Using the Living Costs and Food Survey

Abstract

Policy-makers and practitioners need a good understanding of older people’s expenditure and consumption to inform the design of policies and services that affect their lives. This paper uses data from the 2010 Living Costs and Food Survey to examine and explain levels and patterns of expenditure among households headed by someone aged 50 and over. Expenditure is defined based on 12 broad categories, which reflect the international standard ‘Classification of Individual Consumption according to Purpose’, and is equivalised to control for household size. We report the results of cluster analysis which segments older households depending on their predominant patterns of expenditure. CHAID (decision tree) analysis and bivariate analysis is then used to understand the profile of each cluster in relation to their demographic, socio-economic and other characteristics. Based on their patterns of expenditure, six distinct clusters of older households emerge from the analysis. The findings raise important questions for government policy in the UK in relation to the extent and nature of expenditure poverty among older consumers.