Matthew Fletcher Associate Partner Aon
Case study: Which life expectancy?
Globally, we have been through a period of very high numbers of deaths during 2020 and 2021, particularly in the middle of the pandemic waves. Analysis of mortality data for 2020 has led to several recent articles in the media, all with headlines relating to UK and global life expectancy.
All of these articles (at least in their headlines) give a misleading picture of future life expectancy. This is because the figures quoted relate to what is technically called ‘period life expectancy' which does not predict actual lifespans. Instead the figures show how long people would live if current death rates continued for the rest of their lives. No one actually expects this to happen- it is akin to imagining that the original pandemic level mortality continues unabated (with no vaccination, immunity or any other form of mortality improvement) for all of time. Instead, the falls in life expectancy in the headlines are simply a reflection of the higher-than-usual level of deaths during the pandemic.
- ‘Life expectancy in England falls to lowest level since 2011'
Source: The Guardian, 15 September 2021 (here)
This article refers to the 2021 edition of the ‘Health Profile for England' report which Public Health England (PHE) released in September 2021. One statistic presented by PHE, which forms the headline of the article, is that ‘life expectancy' in England had fallen to the lowest level since 2011, with a reduction of 1.3 years for males and 0.9 years for females in 2020 compared to 2019.
- ‘Covid-19: Life expectancy is down but what does this mean?'
Source: BBC, 23 September 2021 (here)
This article carries a similar headline message to The Guardian piece, but based on a slightly different source: mortality rates for the period 2018 to 2020 released by the Office for National Statistics (ONS) in its new ‘National Life Tables'. These show that ‘life expectancy' at birth in the UK has fallen since the previous ONS publication - for males, life expectancy has fallen back to levels reported for 2012 to 2014, while for females there was virtually no improvement in life expectancy compared to the tables which covered 2015 to 2017.
- ‘Covid sparks biggest fall in life expectancy since second world war'
Source: FT, 27 September 2021 (here)
The FT article covers a September 2021 paper by Oxford academics which made use of mortality data for 29 nations spanning Europe, the US and Chile. It found that 27 of these have seen reductions in life expectancy over 2020 "at a scale that wiped out years of progress on mortality". For example, the report shows that males in the US saw a fall of 2.2 years relative to 2019 levels.
How long we expect people to actually live (termed ‘cohort life expectancy') is a different question, and it is this which matters to pension schemes when valuing their liabilities. The BBC article does attempt to explain this distinction, describing some of the considerations needed when forming a view on future mortality improvements - which include both positive and negative effects from the pandemic. For example, we need to consider the impact of Long COVID on the life expectancy of individuals and the impact of disruption to non-COVID healthcare, potentially countered by more positive factors such as a longer-term willingness to provide additional funding to the NHS.
Although death rates have been high over the last 18 months, this is by no means expected to continue in the future. It's important that pension schemes temper their forecasts of life expectancy based on expert actuarial advice.
Case study: Less Long COVID?
Long COVID is a term used to describe illness in people who have recovered from COVID-19 infection but continue to report ‘lasting effects'. There is no universally agreed definition on how long these lasting effects need to persist to qualify as Long COVID, but 12 weeks is a common cut-off used.
As noted in the first case study, Long COVID is one of many areas to consider when evaluating the longer-term impacts of the pandemic. From a pension scheme perspective, it remains to be seen what effect may ultimately feed through into ill-health retirement rates and/or life expectancy.
Several recent articles reported on updated analysis from ONS, which suggests that early estimates of the prevalence of Long COVID were likely to have been significantly overstated - for example this article from the BBC.
- ‘Long Covid less common than feared - ONS study'
Source: BBC, 17 September 2021 (here)
This article reports that Long COVID may be less common than previously thought. ~It is now estimated by the ONS at 1 in 40 people who have had COVID-19, rather than the 1 in 10 which it estimated in April. The latest estimates are based on self-reported data up to 1 August 2021, from a sample of over 20,000 Coronavirus Infection Survey participants.
Even on the latest data, different measures of Long COVID prevalence can produce quite different results. ONS have considered three ways to measure prevalence - the first two look at symptoms remaining 12 weeks after infection, and the third simply counts those who self-report long COVID:
- 3.0% reporting any of 12 common specific symptoms* for a continuous period of 12 weeks from infection - this compares to 0.5% in a control group without a positive COVID-19 test;
- 5.0% reporting any symptoms at any point 12 to 16 weeks after infection - here the control group prevalence is 3.4%, indicating that symptoms are relatively common in the population at large;
- 11.7% based on self-reported Long COVID (rather than reporting any of the 12 common symptoms), falling to 7.5% reporting that COVID resulted in limitation to day-to-day activities
* the 12 symptoms tracked were: fever, headache, muscle ache, weakness/tiredness, nausea/vomiting, abdominal pain, diarrhoea, sore throat, cough, shortness of breath, loss of taste and loss of smell.
These significantly updated estimates show the importance of being aware of the uncertainties around Long COVID, especially given that the illness itself is new and that estimates are based on the emerging data, novel survey methods and self-reporting.
