Life expectancy growth in England is slowing, with some regions experiencing a drop of one year, according to research by a Department of Health agency.
Figures from the Office for National Statistics show that during 2012 to 2014, life expectancy for newborn baby boys was highest in Kensington and Chelsea at 83.3 years and lowest in Blackpool at 74.7 years.
The rate of increase of life expectancy in England has slowed down in recent years, with the relative increase in deaths in 2015 a contributory factor
Peter Bradley, Public Health England
The divergence in life expectancy across the country is a particular cause for concern for pension providers, who must establish means of delivering appropriate retirement income to members with increasingly varying longevity expectations.
PHE has not published data on the fall in life expectancy, but The Times has reported that some of the biggest drops were in former industrial and mining areas.
For example, in Amber Valley, Derbyshire, female life expectancy is down more than a year to 82.4, while in Hartlepool, County Durham, male life expectancy dropped more than a year to 76.4.
Peter Bradley, director of knowledge and intelligence at PHE, said: "As has been widely reported, the rate of increase of life expectancy in England has slowed down in recent years, with the relative increase in deaths in 2015 a contributory factor.”
However, he cautioned that populations are small in some areas. “Care needs to be taken when analysing and interpreting local authority data as their small populations mean that their life expectancy is subject to more fluctuations from year to year.”
The state pension is funding the rich
Hugh Nolan, president of the Society of Pension Professionals and director at consultancy Spence & Partners, said that economic disparity across England will tip the state pension in favour of the wealthy.
“How on earth do you put that across the whole population with very different people within it? Practical difficulties there mean that you end up with a one-size-fits-all state pension,” he said.
"The people who need it most are the people who benefit from it least because they retire, they live a relatively short period of time and die, and the richer people who have less need for the state to support them live for an extra five or even 10 years,” he added.
The slowdown is feeding into the market
With the old idea that life expectancy will keep going up now refuted, a rethink on liability projections will be essential.
Steven Baxter, head of longevity innovation and research at consultancy Hymans Robertson's Club Vita, said that the slowdown in life expectancy increases is being recognised by the pensions industry.
“The world is split on [the slowdown] because we still don’t really understand the full background to the causation,” he observed.
“It’s being reflected in many schemes, who are making their outlook for the future, which is obviously helping funding positions,” Baxter added.
He said the changes were also being reflected in the insurance market, with the cost for transferring longevity risk coming down.
Lower rise in life expectancy no cure for schemes
After years of steady increases, improvement in life expectancy dropped to 1 per cent a year in 2016 from 3.1 per cent per year in 2011 in England and Wales, but low discount rates mean the rises still matter.
Joe Dabrowski, head of investment and governance at the Pensions and Lifetime Savings Association, said that schemes have recognised the theme of the current life expectancy slowdown.
“We’ve seen that kind of flat-lining trend for lower economic groups for the past five years. If that continues over the next three or four, that looks like maybe tending towards a longer-term trend,” he said.
