On the go: Mortality rates in England and Wales were on average 3.8 per cent lower in 2019 than in 2018, which is the largest annual fall in mortality rates since 2011, new data showed.
The figures, released on Monday by the Continuous Mortality Investigation, mean cohort life expectancies at age 65 are around one month higher than in 2018, for both males and females, although they are still lower than in all earlier versions of the CMI Model.
However, according to Cobus Daneel, chair of the CMI Mortality Projections Committee, it is “important to stress that mortality rates are volatile and, in isolation, the improvement seen in 2019 should not necessarily be interpreted as a return to the high level of improvements that we’ve seen in previous decades”.
He also noted that not everyone experiences the same level of mortality improvements.
“In recent years, people living in less deprived areas of England and Wales have experienced higher mortality improvements than those in more deprived areas. Whilst our projections model uses data for the general population, it provides a flexible framework that can be adjusted to suit our users’ needs.”
According to Mercer, this reduction is a timely reminder of the possible risks to defined benefit scheme funding related to increases in life expectancy.
Alastair Walker, UK head of longevity analytics at the consultancy, said: “As the risks to pension funding associated with improved longevity continue to grow in significance for many schemes, trustees and sponsoring employers need to better understand how improvements in life expectancy will impact them.”
He noted that lower mortality rates in 2019 are raising questions about whether the slowdown in mortality improvements in recent years will continue, or whether improvements could start to accelerate again.
“This volatility highlights how important it is that trustees and sponsors understand the financial consequences of underestimating long-term mortality assumptions.”
