In recent years, actuaries have been surprised that there has been a downturn in the life expectancy graph in the UK, which until recently had shown positive growth since the 19th century.
Regional variations have had a major impact. A recent paper from The Health Foundation confirmed that between 2014 and 2016, men from the most deprived areas in England were expected to live 19 fewer years in good health than contemporaries from the least deprived 10% of areas.
Life expectancy
The latest statistics have an impact on everyone planning their financial future, and on advisors preparing the best scheme for their clients.
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Advisors will recognise the issue of life expectancy, as clients could risk running out of money during retirement.
So why does there seem to be a slowdown in the incremental rise of life expectancy which has been evident over the past century?
The 20th century saw dramatic increases in life expectancy as a result of public health measures and childhood immunisation programmes. Medical advances and changes in lifestyle, such as the reduction in the number of smokers, have had a major impact on the statistics.
Mortality trends
Significantly, a new report from the King’s Fund notes that healthy life expectancy is a measurement which should be considered, as later years of life may include serious physical and mental health issues, affecting the finances of the individual.
The research also confirms that 2010 marked a turning point in long-term mortality trends. In the 100 years to the 2010-12 measure, life expectancy increased by almost three years every decade. Between 2011 and 2016, this increase fell to 0.4 years for men and 0.2 years for women. Indeed, 2015 saw life expectancy fall across almost all of Europe.
It is important to note that the number of deaths does not mean mortality rates are increasing and life expectancy falling. It may be a result of the growth in the UK population, or the fact that populations may be becoming older.
Actuaries and advisors understand that an age-standardised mortality rate is a more useful measure of the changes, as it takes note of population size and mean age.
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