The life expectancy of people with defined benefit pensions appears to be improving at a faster rate than that of the rest of the population, research by the Continuous Mortality Investigation (CMI) has revealed.
According to the latest CMI Mortality Projections Model, increases in life expectancy have slowed down across the population since 2011 and continued through 2016, after a decade of marked improvement.
However, the data found the mortality among pensioners who received a guaranteed income for life through a DB scheme had risen more rapidly.
The overall slowdown led some to suggest that the rapid improvements in mortality in the first decade of this century may have permanently ended.
But the CMI was more cautious, saying there was "significant uncertainty" over whether the slowdown would continue.
The CMI, which is owned by the Insitute and Faculty of Actuaries but independently run, stated that it was "important to understand" that mortality nevertheless was likely to continue to improve.
James Tait, chairman of the CMI executive committee, described the CMI Mortality Projections Model as "an important tool for the UK Pensions and Insurance markets",
"CMI 2016 has thrown more light on some very interesting trends – namely that, in recent years, the rate at which mortality is improving has been slower than in the first decade of this century.
"Although it is highly likely that mortality will continue to improve, there is significant uncertainty as to whether this recent slowing in the rate of improvement will continue.
"The slowing raises important questions about contributing factors. Indeed, our analysis of pensions data implies that the causes could be more complex and stratified than the pure life expectancy figures, that only consider population data in aggregate alone, would suggest."
Tim Gordon, partner and head of longevity at Aon Hewitt, read the latest figures as an indication that the mortality rates would continue to slow.
"It is increasingly difficult to argue that the fall off in national mortality improvements since 2011 is simply a blip," he said.
"However, the underlying picture for pension schemes is complex and, accordingly, a more-tempered view is appropriate.
"In particular – and perhaps surprisingly – less-well-off defined benefit scheme pensioners appear to have had higher recent mortality improvement than both the national population and better-off defined benefit scheme pensioners."
He said there was a risk that changing or incomplete data on longevity meant schemes considering hedging their longevity risk could "end up with poor pricing, or make a decision based on out-of-date information".
james.fernyhough@ft.com
