Empty Nesters in the UK enjoy Europe’s highest annual disposable income per capita. Wealthier and more inclined to spend lavishly on rewarding themselves, they develop new purchasing habits and new consumer packaged goods (CPG) needs as they adjust to their new freedom.

In 2003, Empty Nesters spending on CPG accounted for £38.4 billion and is set to rise to almost £46 bn in the next five years. But as they age, health concerns and worries over money restrict their budget.

“The rise in self-rewarding behaviour among Empty Nesters demonstrated by their increase in spending on food, drinks and personal care, is at the centre of what makes them a very attractive market to CPG manufacturers and retailers. The search for more enjoyment and pleasure in every aspect of life allows CPG players to offer added-value products which have obvious merit to consumers,” said Andrew Russell, consumer markets analyst at Datamonitor and author of the report.

Early Empty Nesters, those aged between 50 and 64, are rapidly becoming a key consumer group. By 2008, there will be a total of 8.5 million Early Empty Nesters in the UK, and their annual disposable income per capita will have increased by 8.5 per cent to £17,872. This equates to 147 per cent of the national average. In Europe, the average is forecast to be £14,328. This sudden increase in wealth often sparks some highly indulgent spending, not only on big purchases such as travel, new homes and new cars, but also on everyday purchases including high quality food, fine drinks and pampering personal care.

“The rapid growth in spending comes as a result of increasing incomes coupled with people planning for an enjoyable and stress-free retirement and a strong desire to reward themselves both for raising a family and for a lifetime’s work,” said Russell.

Empty Nesters are well aware that they face elevated health risks from, for example, too rich a diet. As their goal is to enjoy a long and luxurious retirement, good health and fitness are essential. Empty Nesters, therefore, have a greater need for health-related products such as functional food and drinks which can enable them to better enjoy their new lifestyle. The fledgling consumer category therefore often develop health regimes whereby they ensure that they have a constant intake of healthy products so that they can enjoy the lifestyle they want to lead.

Late Empty Nesters are currently more numerous than Early Empty Nesters: there are 9.5 million in the UK. Their disposable income is however smaller as they are generally living on their pensions and any savings they may have. The average Late Empty Nester has a disposable income of £10,800. Although this is still higher than the European average £10,019, this places significant constraints on their ability to indulge in self-rewarding behavior. As a result, Late Empty Nesters tend to focus on more of a “less of the best” approach, reserving high quality food, drinks and personal care products for special occasions such as anniversaries and family birthdays.

Late Empty Nesters’ ability to enjoy retirement to the full has also been held back by boomerang babies - children returning to the family home after their initial departure. The increasingly common pattern can be a drain on parents’ income and time long after they originally expected to be independent.