As baby boomers begin to retire.

I was born in 1948. In the days of the largest cohort of births ever seen. Affectionately known as the baby boomers, we’ve also been one of the luckiest generations ever; we were teenage consumers in the swinging sixties, we went to fee-free university with a free student grant.

Just as we began to start earning serious money in the early eighties, Nigel Lawson slashed the high rate of income tax from 60% to 40%, and the stock market embarked on a twenty-year bull rampage. To cap it all, many of us enjoyed index-linked final salary pension schemes.

But something significant happens next year; the first lot of boomers hits 65, start drawing their pensions and adjusting their pensions and savings to a new reality. That process will continue for another twenty years.

The question is whether such a significant generational shift in savings habits will impact financial assets — and if so who will be the winners and who will be the losers? And what are the long-term investment implications of an ageing economy?

Healthcare – is bound to benefit

Currently one in every fourteen people in the world is over 65. By the middle of the century, one in six will be. Thanks to inheritances based on previous decades of house price booms, for the first time in history the will be a generation simultaneously old and relatively wealthy.

Shares and investments: for any investor looking for near perpetuity one sector stands head and shoulders above all others; pharmaceuticals and healthcare. All the pharmaceutical companies look set for a few decades of secular growth. Of course, there will be government pressure on pricing but clever cures and wonder drugs will always trade at a premium. An investment idea I am attracted to is elderly care in general and care homes in particular. Back in November, Aegon announced the launch of its ‘Target Healthcare Property Unit Trust’, investing primarily in care homes. Although not focused on the retail investor, be prepared for many similar opportunities. Southern Cross Healthcare is a quoted operator of care homes. Care UK, is another.

Leisure: Other commentators point out the attractions of leisure, recreation and tourism and even financial advisers, but these all have the disadvantages of being discretionary expenditure.

There is nothing discretionary about drugs or healthcare. Time to invest.