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The Actuary The magazine of the Institute & Faculty of Actuaries

Five hours extra every day?

Life expectancy in the UK is increasing at a rate of five hours every day, an expert said today. Professor Tom Kirkwood, director of the Institute for Health and Ageing at the University of Newcastle, said people were living for around two years longer each decade. He said previous forecasts of life expectancy had predicted the rapid increase seen in recent decades would begin to level off steeply, but this was no longer necessarily thought to be the case.

Speaking at the National Association of Pension Funds annual conference in London, he warned that people did not know what the future held in terms of life expectancy, with a minority of scientists claiming advances could lead to people living for up to 200 years. ‘Scientific advances could radically increase the rate of growth in human life expectancy.’ In order to cope with this, any rational retirement policy needed to be flexible.

Rising life expectancy is already presenting challenges to pension schemes, with many companies citing increased longevity as one of the main reasons they are closing final salary pensions and replacing them with schemes under which the individual, rather than the company, bears the risk. Professor Kirkwood said the recent Pensions Commission’s report and the government pensions white paper were important advances towards addressing the issues created by people living longer, but he added: ‘They are only the beginning of a process that is long overdue.’

He also called for there to be more dialogue between the medical and actuarial professions on life forecasts, upon which he said crucial business decisions were based.