The BBC has reported that the mortality rate in England and Wales improved again last year. This could have a knock-on effect on pensions, actuaries have suggested. The number of deaths fell to 484,000, according to official figures.
After examining the figures the Actuarial Profession said the death rate fell by 4% – down from an average annual drop of 2.4% in the previous decade.
Falling death rates would inevitably make it more expensive to fund pension schemes. Last year was the third in a row in which deaths had been below 500,000.
The figures – from the Office for National Statistics (ONS) – suggest that 20,000 fewer people died in 2011 than would have done in previous years.
Punter Southall’s head of mortality research, Ross Matthews, said: “If the 2011 fall in mortality rates continued, a man of 65 retiring today could expect to live to 91, three years longer than the typical current estimate of 88.”
“A 45-year-old would live to 95, seven years longer. This equates to an increase of up to 15% on pension scheme liabilities, potentially driving deficits by up to 50%”.
But Gordon Sharp, of the Actuarial Profession, warned that death rates could be volatile from year to year, and said that not too much should be read into one year’s provisional improvement.