To millennials, spending £5,000 or more on a piece of jewellery is a concept almost incomprehensible. Two decades ago this was the norm, today as the norm is spending that much travelling.
Millennials vs Elderly
Insure4Retirement is a Home and Travel Insurance provider for the Over 50s. As much as 73% of people who completed a quote, owned over £5,000 worth of gems and precious metals. Jewellery was listed as part of the cover required when searching for an insurance quote.
Data from the Wealth and Assets Survey (WAS) 2016 shows that households people who had reached retirement age, having accumulated more than £66,900 in household assets. This is what the insurance industry refers to as the largest ‘physical wealth’. The same survey showed that 16-24-year-olds have the lowest physical wealth.
It is unsurprisingly, one could argue that the younger generation hasn’t had enough time to accumulate physical assets. This is partly true, as the average age people are now getting on the property ladder is over 30 years old, seven years older than the average in 1960. Simply put, Millennials don’t have homes filled with stuff, because they don’t yet own homes to fill with stuff.
Materialist vs Experiences
Despite this being a contributing factor to the huge gap in physical wealth between the younger and older generations, industry analysts say that it’s largely down to the fact that Millennials simply don’t see value in spending their cash on valuables. “Millennials gravitate toward spending money on experiences, and not things” according to Sarah Berger of TheCashlorette.com.
Today’s younger generation is far more likely to spend a significant amount of money travelling abroad. Bali and Thailand are both popular destinations for under-30 Brits – than on fine jewellery. According to the Office for National Statistics (ONS), spending incomes on experiences isn’t isolated to the younger generation.
The ONS highlighted that households aged between 65 and 74 are now spending nearly a fifth (18%) on experiences. Perhaps fuelled by the recent availability of reasonable travel insurance for older people with medical conditions. Over 65s are spending the highest percentage of their income on package holidays than they have in a long time.
The Diamond Industry
With the high living costs in UK households, the jewellery and retail industry are competing unsuccessfully. The younger typically spends around 30% of their income on rent. In comparison to the 10% of their grandparents would have spent in the 1960s. Leaving them with less to splash out on luxury possessions as they opt for Instagram-worthy brunch spots in lieu.
The diamond industry has reportedly slowed as our Millennial consumers are far-less enamoured by traditional diamond jewellery than their parents. “Diamond jewellery appears to be low on the buying lists” of today’s youth according to Des Kilalea. A worrying situation for the jewellery industry, as the Millennial generation edge towards becoming the most active consumer group.
According to Insure4Retirement, whose customer base is predominantly made up of baby-boomers, 50% of all specified items of jewellery are diamond. If the jewellery industry can’t find a way to grip the hearts of our youth, we can expect to see these figures decrease with each decade, until the once much-coveted diamond becomes yet another icon of a bygone era.