Personal Pension  

Older people living longer ups pressure on providers

Older people living longer ups pressure on providers

The latest Office for National Statistics data has revealed that mortality rates have improved in all age groups, but more recently at a faster rate in the older age groups.

In 2012–2014, a man in the UK aged 65 had an average further 18.4 years of life remaining and a woman had an average further 20.9 years of life remaining. The most common age at death for men was 86 and for women was 89.

Life expectancy at birth in the UK has increased since 1980–1982 by 13.5 weeks per year on average for men and 9.8 weeks per year on average for women.

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Male life expectancy has increased from 70.8 years in 1980–1982 to 79.1 years in 2012–2014 and female life expectancy has increased from 76.8 to 82.8 years, in the same time period.

The increase in longevity of older age groups is thought to be because of a combination of factors, such as the improvements in mortality from circulatory diseases, such as heart disease and stroke, partly driven by changing smoking habits, along with the diagnosis and treatment of cancers and medical and technological advances.

David Beattie, managing director of direct channel at Aegon UK, commented that modern retirement is changing quickly, with ever increasing life expectancy, better health in later life and a growing appetite to continue working past traditional retirement age.

“The life expectancy of those born today is 81, but it’s possible they could live a lot longer. Even now, many people will spend 20 or 30 years in retirement.”

He noted that the at-retirement reforms should complement the changing retirement landscape, but it is important that people balance the decision to access savings in early retirement, versus the likelihood that they will live for a long time.

“These calculations aren’t easy and there is always an element of uncertainty. With this is mind, products that provide people with a guaranteed income, in combination with flexibility, are likely to prove more and more popular and this is something the industry must continue to respond to.”