Planned increases to the state pension age need to be reviewed in light of the slowdown of longevity improvements in the UK, Royal London has argued.
New figures published by the Office for National Statistics today, 7 August 2018, revealed that in the second decade of the 21st Century, the UK has experienced one of the largest slowdowns in life expectancy at birth, and at age 65, for both males and females.
Between 2000 and 2010, the UK’s life expectancy at birth increased from 80.2 years to 82.34 years;’ however in the six years from 2011 to 2016, life expectancy has slowed significantly, moving from 82.72 years to 82.84 years. In 2015, there was a sharp increase in deaths, which led to the first reduction in UK life expectancy at birth of the 21st Century.
As a result, Royal London pensions specialist Helen Morrissey believes that the planned increase to the state pension age will need to be reviewed to take account of the latest data. The state pension age in the UK will rise to 66 in 2019 for both men and women, increasing to 67 by 2028 and 68 by 2039; the latter increase was brought forward by seven years following the Cridland review.
However, on a more positive note for pension schemes, Morrissey said that company pension schemes may find that their liabilities are lower than expected.
“Much more work is needed to understand the reasons for this data so that pension funds and pension providers understand whether this is a temporary slowdown or part of a much longer-term trend,” she added.
Royal London director of policy Steve Webb has advised the government to conduct urgent research into these “worrying trends”.
“If other countries can ride out economic storms and continue to drive up life expectancy, there is no reason why the UK should not be able to do so.”