UK - Half of all workers currently aged 30 may live to the age of 100, according to figures released by Paternoster.
The figures, based on Paternoster’s proprietary mortality modelling techniques, showed increasing longevity to be one of the most significant problems for pension fund trustees in adequately providing for retirement.
Paul Hamilton, partner, Barnett Waddingham, said: “I’m not surprised at the number, but it is at the top end of the scale.”
He added that given current improvements in longevity the figure was plausible. Compared to current cautious projections which generally place life expectancy for a 30 year old at around 90 years, a rise to life expectancy of a century would improve pension scheme liabilities for those people by around 20-30%
Hamilton said it was quite possible people would work past the retirement age of 65 and the effects were more likely to adversely impact on defined contribution (DC) scheme members.
He thought annuity prices may rise as a result and commented trustees should consider prudent assumptions.
“Trustees can at least take some comfort that the problem is very far away, these people are not about to retire any time soon,” he added.
Under current models, such a jump in longevity might lead to 20% of people currently aged 30 living to 120 or more, although Hamilton added the lack of relevant data made such assumptions little more that conjecture at present.
He noted that given such scant information, it was uncertain whether life expectancy would increase so much, or there would be a ‘spike’ in mortality at some point between the ages of 100 and 110.
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