In Focus: Vulnerability  

What an endemic virus means for your pension clients

What an endemic virus means for your pension clients
Photo: Serena Koi via Pexels

Covid-19 has been branded as 'endemic' by the World Health Organisation and could have a negative impact on life expectancy in the medium term, experts have warned.

In a press conference, Michael Ryan, executive director of the WHO's Health Emergencies Programme, said: "It's important to put this on the table: This virus may become just another endemic virus in our communities, and this virus may never go away."

Globally, as of February 10, there have been 106,321,987 confirmed cases of Covid-19, including 2,325,282 deaths, reported to the WHO, and this figure will only go up, despite the roll-out of vaccination programmes globally. 

What this means for clients is that the virus will "have a negative impact on population health and life expectancy in the medium term", according to Stuart McDonald, head of demographic assumptions and methodology at Scottish Widows.

He said: "The virus is likely to become endemic, resulting in further loss of life in future winters, and delays to screenings and treatments will lead to worse outcomes for many of those affected. These effects may however be partly offset by improved infection control measures reducing deaths from seasonal flu."

But while your clients' health is likely to be impacted, and possibly a greater number of deaths with each winter season, just as from the flu and pneumonia, McDonald said this should not have a significant impact on long-term mortality rates. 

He commented: "Although the pandemic is likely to result in life expectancy increasing more slowly than might otherwise have been the case, it is expected to continue to increase. Given we have also seen recent progress with vaccine science and there has been a greater focus on public health, we must see this as a small positive during a particularly difficult time."

McDonald's comments echo those made by the Government Actuary's Department last year, when its three-page paper - Making sense of Covid-19: mortality impact on pension schemes - said deaths from a pandemic should not be expected to have a long-term effect on mortality rates for the purposes of actuarial calculations of scheme funding needs.

And as the Office for National Statistics has shown, life expectancy is still expected to rise for both women and men (currently 83.4 and 79.1 for men and women respectively).

Therefore, McDonald said: "People of retirement age today can still expect to live for twenty years on average, so we would encourage everyone to take time to review their retirement savings plans and discuss any concerns they may have with a financial adviser, or if they are unable to do so, they can seek free and impartial guidance from the Money Advice Service."