The UK could be approaching an “inflexion point” in life expectancy trends, with potential implications for pension scheme funding and pension risk transfer (PRT) pricing, LCP has warned.

In its latest longevity report, Are life expectancies bouncing back?, LCP said emerging mortality data pointed to a potential rebound in life expectancy assumptions after several years of decline following the pandemic.

The firm noted that record-low death rates in the UK are already prompting trustees, sponsors and insurers to revisit their assumptions, while future pricing pressure could accelerate plans to transfer longevity risk in the short term.

Indeed, longevity swaps reached a record of almost £26bn in 2025, suggesting some revival in demand for hedging longevity risk.

The report found that mortality rates among pensioners, which are most material for defined benefit (DB) pension schemes, have been consistently falling, with 2026 data broadly consistent with the pre-pandemic trend.

It also revealed that mortality in middle age has been falling, albeit more slowly, while emerging data at younger ages suggested that a previous upward trend in mortality may be changing, with much lower mortality observed over the past 18 months.

LCP claimed the industry-standard Continuous Mortality Investigation (CMI) model could lead to further increases in life expectancy assumptions in its next update, potentially larger than those seen in either CMI_2024 or CMI_2025, depending on how the model is calibrated.

The report noted that life expectancy at age 65 has risen by three to four months in aggregate over the previous two CMI core models.

At the same time, LCP’s latest insurer survey suggested that life expectancy assumptions in the PRT market have stabilised after several years of decline, with no material change between 2024 and 2025 year-end assumptions.

LCP warned that, if assumptions begin to move upwards again, schemes could see increased liabilities and upward pressure on pricing, particularly for longevity swaps and, over time, buy-ins.

LCP partner and head of longevity and demographic insights, Stuart McDonald, commented: “After several years of falling life expectancies, the latest data suggests we could be at an inflection point. There is a real chance that future updates push life expectancy assumptions higher again.

“For pension scheme trustees and sponsors, that creates a clear need to stay close to the evidence and to understand how quickly pricing and funding positions could move.”

LCP partner, Ben Rees, added: “Trustees and sponsors have become used to CMI updates lowering life expectancy. The last two models break that pattern; for many schemes, adopting the core model out of the box could significantly increase liabilities.

“The outlook remains uncertain, with questions over NHS recovery and the long-term impact of developments such as anti-obesity drugs.”

With this in mind, LCP urged pension schemes to review their longevity assumptions, regardless of their endgame strategy.

For schemes planning to run-on, it said robust longevity assumptions would be critical to assessing surplus and the extent to which it could be released.

For those planning to insure or use emerging endgame solutions, LCP told trustees and sponsors to check whether journey plans remain on track as views on longevity evolve.

The firm added that, if the market is at an inflexion point, current conditions could represent an attractive window to hedge or transfer longevity risk.

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