Trustees warned over accelerating mortality rate improvements

Trustees have been warned to keep a close eye on longevity assumptions as improvements to mortality rates resulted in 20,000 fewer deaths than expected last year in England and Wales.

Analysis by the Actuarial Profession of the latest Office for National Statistics figures found a 4% year on year reduction in mortality rates - significantly above the average 2.4% annual improvement seen across the last decade.

The total number of deaths was 484,000, making 2011 the third year in a row that the number has been below 500,000 - a figure exceeded each year from 1953 to 2008.

Actuarial Profession chairman of the continuous mortality investigation Gordon Sharp said: "There have been 20,000 fewer deaths than would have been expected if there hadn't been this improvement. To put this into some kind of context, that's enough to fill the O2 arena in London.

"For anybody in doubt that recent strong improvements in mortality rates might be tailing off, last year's data suggests that the opposite is true."

Sharp said that trustees therefore had to keep looking at mortality assumptions and consider increasing the level of prudence that was applied to them.

The difference between mortality rates in men and women also narrowed last year to 0.1 percentage points - the average gap since 2001 has been 0.8 percentage point.

Sharp added out that the ‘golden cohort' of people born around 1931 had shown particularly strong improvements of almost 5%.

He also cautioned against reading too much into the figures for a single year.

"However, as policy makers continue to look for solutions to the challenges faced by an ageing population, it has never been more important to ensure that mortality figures and trends are properly analysed," he said.