The baby boomers helping Saga to hit targets

Saga is benefiting from the increased wealth of baby boomers, people who were born after the second world war and before the swinging sixties, who have a healthy disposable income thanks to soaring house prices and generous pension schemes and are choosing to spend their cash on holidays to far flung places.

Saga reported solid trading across its core insurance and travel businesses in the five months to February 1.

Saga’s CEO Lance Batchelor, told shareholders at the group’s AGM: “We have made a good start to the year across our core trading divisions. We continue to focus on our strategic objectives and remain on track to deliver on the targets we set out at our preliminary results on April 19.”

The group said it is investing in future growth through the development of opportunities in emerging businesses, while maintaining its simple and efficient operating model.

Saga said its most recent annual profits leapt 55 per cent as more people opt to go on holiday without annoying children and their parents.

Trading profits at Saga’s travel business rose more than a quarter - up 26.5 per cent to £17.2m - in the year to January 31 as passenger numbers jumped 10 per cent to 189,000.

Older travellers now account for 58 per cent of travel and tourism expenditure in the UK and Saga said this generation will become increasingly important as more people live longer and healthier lives.

In 2013, the over 50s in the UK spent roughly £1.9bn on cruise holidays. This will increase by 46 per cent to £2.8bn by 2020, according to analysis by Cebr.

Saga’s head of communications Lisa Harris said: “Many people approaching retirement look forward to being able to take holidays when they want to, rather when work or family commitments dictate.

“With more time available to them they don’t have to limit their holidays to a week or two, they can go for longer and travel much further afield.

“These are the generations that really broke the mould when it comes to what retirement looks like, and having done the beach holidays throughout their working lives often have a real thirst for adventure and a desire to do something different.”

Saga said it has evolved its travel offering to include dream holidays such as Grand Tours of India, tours through Uzbekistan taking in the famous silk-route, and real backpacking for grown-ups in Africa.

“It’s for this reason that many older people shrug off the title of retirement. They may no longer be working but they have no intention of stopping - in fact it’s quite the opposite for many they’re just beginning to realise their dreams,” said Ms Harris.

Cruises remain a key attraction for the over 50s, helped by Saga’s relatively small cruise ships.

The Saga Sapphire has a maximum of 750 passengers and the Saga Pearl II has a maximum of 449.

Saga said it would pay a full-year dividend of 7.2p per share, up from 4.1p last year.

Saga’s interim results will be announced on September 21.