On the go:New data from the Office for National Statistics shows that life expectancy improvements continue to stall, which is expected to improve pension schemes liabilities.
Life expectancy at birth in the UK is projected to increase by 2.8 years to reach 90.4 years for boys and by 2.4 years to 92.6 years for girls born in 2043, according to new data from the Office for National Statistics.
However, these figures are lower – 2.6 years for males and 2.7 years for females – when compared with the 2016-based projections, the ONS added.
The data also showed that people aged 65 years in the UK in 2018 can expect to live on average a further 19.9 years for males and 22 years for females, and is projected to rise to 22.2 years for males and 24.2 years for females in 2043.
According to Mark Sharkey, engagement lead at Club Vita, the key takeaway from the ONS data is that life expectancy continues to increase at a slower rate than previously projected.
“Following a period of very fast improvements in life expectancy, we saw in the mid-1990s and 2000s, in the last few years we saw a slower rate of improvement,” he said.
“This slowdown in the latest couple of years has been factored in to the projections that pension schemes use to calculate their liabilities; we have seen these continue to reduce as a result.”
However, Mr Sharkey noted that the ONS figures are based on the general population, and it is important that “pension schemes drill down into the trends and experiences across the socioeconomic spectrum”.
“We see that two thirds of pension scheme liabilities are concentrated with more comfortable, better-off pensioners, and these are more resilient to the slowdown that we are experiencing in recent years,” he added.
The ONS research follows LCP’s 2019 Longevity report, published in August, which suggests that the next version of the Continuous Mortality Investigation’s projections model, due to be published in 2020, will produce slightly longer life expectancies, increasing pension scheme liabilities.
