UK Forecasts Decreasing Life Expectancy

pension retirement

The average life expectancy in Britain has dropped by six months in the biggest reduction in official forecasts by the Institute and Faculty of Actuaries (IFoA).

The IFoA calculates life expectancy on behalf of the UK pension industry and has yet to suggest any reason why longevity is declining for men and women in England and Wales. Other analysts have begun to speculate on the reason however; from blaming cuts in the NHS and austerity to worsening obesity, diabetes and dementia.

The new projections in life expectancy show that men who reach age 65 are likely to live until 86.9 years old, down from 87.4 years, while women who reach 65 are likely to live until 89.7 years old.

It has been suggested that evidence of slowing life expectancy is in fact a trend and not an anomalous result, first emerging around 2010-11.

The decline in life expectancy also seems to be accelerating. Projections from last year declined by two months but this year that number has increased to six months. Comparing this to 2015, life expectancy is down by 13 months for men and 14 months for women.

In view of the increasing state pension age in 2037 to 68 years old, implications for health, finance and government policy should be considered. The government has also floated the idea of increasing the state pension age to 70 but should life expectancy continue to fall it will likely come under pressure.

Pension companies have already started to cash in on the falling life expectancy. Just recently, Legal & General have said it was releasing £433m in reserves to cover future pensions because of the reduction announced by the IFoA.

A lower life expectancy implies that those living shorter lives will require less money to finance retirement, or alternatively, will be able to pick up a better pension.

The institute further added that earlier projections were much more optimistic, and new projections have considered the recent death rate figures.

While many theories have been suggested as to why human life expectancy has been stagnating in recent years, Sir Michael Marmot, director of UCL’s Institute of Health Equity, dismissed the idea that humans are reaching the limits of their natural life spans. Sir Marmot went on to suggest that it is “entirely possible” that austerity has had an impact on the results however.

Public Health England has further reviewed possible causes including influenza and population changes. They concluded that evidence was insufficient to show a change in trends.

Other European countries have also been seen showing a stalling life expectancy but not to the extent seen in England and Wales.

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