Mortality trend shift could cut funding requirements

The consultancy said its mortality rates now stand at their highest for a decade (excluding the Covid-19 years) - highlighting that 2022 could see around 30,000 additional deaths.

LCP predicts that if the next Continuous Mortality Investigation model, due to be published next year, fully reflects the latest statistics on deaths, then life expectancies could reduce by around nine months, which could equate to a £100m lower funding requirement for a £3bn scheme.

The consultant explained that while the year started well, with the winter and spring months experiencing the lowest level of deaths in a decade across England and Wales, it said mortality rates have shot up since June, reaching the highest mortality rates for ten years, Covid-19 years aside.

LCP said that, if this trend continues to the end of the year, mortality rates in England and Wales in 2022 could be around 5% higher than pre-pandemic 2019, which equates to around thirty thousand additional deaths.

While Covid deaths remain relatively low, standing at about 300 per week since May, LCP said the increased mortality rates could be linked to the emerging repercussions of the pandemic, such as late diagnosis and treatment of diseases, and the growing NHS backlog.

LCP added that it believes high mortality rates will continue for several years given the wider indirect impacts of the pandemic on the nation's general health. 

It said the CMI is publishing the annual update to its model next year and at the moment it is unclear how much weight will be placed on the latest data.

Depending on how the rest of 2022 pans out, LCP said life expectancies could be reduced by around nine months for someone aged 65 if the data for 2022 is fully reflected. However, it noted the CMI may still decide - as they did in 2020 and 2021 - that 2022 is still abnormal and not fully include it in their core model. 

LCP partner Chris Tavener said "The trends over 2022 adds to the evidence that there are ongoing ramifications of the pandemic.

"Whether we are seeing the commencement of a new era and the current high rates of mortality will become the new normal for years to come is still very much unknown. If it is, then it could mean more schemes are further along their journey plans towards full funding or buyout, deficit contributions being cut and company balance sheets improved."

A pivot in mortality rates?

Note: The red line shows the mortality rates each week this year (ie the number of deaths per 1,000,000 people). For comparison, the blue line is the average over the ten years from 2010 to 2019. The rates have pivoted since June with the red line rising above the blue (period highlighted in yellow). The mortality rates have been smoothed and standardised to remove distortions in varying population sizes and age distributions over time, and are based on data published by the CMI.