In years gone by, it was traditional that a man would spend at least one month’s wages on an engagement ring. In fact, it wasn’t uncommon for young couples to splash out up to £5,000 on a piece of jewellery.
However, things have changed over the last couple of decades. Today’s millennials simply don’t have the funds to fork out that kind of cash. With the rising cost of living, it’s not difficult to see that it’s the older generation who are more likely to own expensive items.
According to Insure4Retirement, a Home and Travel insurance provider, it is the over 50s who are far more likely to own over £5,000 worth of precious gems and metals, with over 73% of their clients who completed a quote listing jewellery worth over that value as part of the cover they required.
I’m not sure that this is anything new though. Whilst it can’t be disputed that times have changed, it’s possibly inevitable that it’s the older generation who generally have more spare cash. By retirement age, many pensioners have paid off their mortgage and their dependents have long-since left home, so they naturally have more expendable income than the younger generations.
On top of that, consider how the cost of general living has risen. Back in the 1960s, it was pretty common for a 23 year old to be buying their first home. Fast forward to today, and the average age of a first-time buyer is 30 years old.
The Wealth and Assets Survey 2016 (WAS), found that young people aged 16-24 are overall the least wealthy. This is perhaps not surprising, as at that age, people generally just haven’t had the years behind them in order to build up their assets. So it’s hardly surprising that they aren’t able to splash the cash on expensive pieces of jewellery.
But this isn’t the only reason for the huge difference in physical wealth between the younger and older generations. According to Taylor Smith, CEO and co-founder of Blueboard –
Millennials “aren’t spending our money on cars, TVs and watches,” Taylor Smith, CEO and co-founder of Blueboard, told CNBC. “We’re renting scooters and touring Vietnam, rocking out at music festivals, or hiking Machu Picchu.”
Millennials would rather spend their hard-earned cash on experiences than forking out for high-end jewellery.
As the cost of living continues to rise, jewellery businesses have got a tough road ahead of them fighting to attract the younger generation. Today, 18-34 year olds typically spend 30% of their total income on rent. When you weigh this up against the average of 10% in the 1960s, it’s easy to see why the younger generation of today have less money to splash on luxury items.
Turning away from the expense of the traditional diamond ring, the younger generation are often enticed into buying cheaper gemstones at a fraction of the price. It’s a worrying state of play for the jewellery industry, and unless they can find a way to attract in younger buyers, the situation is only likely to worsen over the coming decades.
*This is a collaborative post.
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