UK - Academic research by the Pensions Institute into forecasted mortality assumptions reveals men could live to the age of 91 by the year 2050 - 12 years longer than currently predicted on average.
A new study conducted by the Pensions Institute suggests UK pension funds and the government may have to pay out around £160,368 per person between them, as men could live a further 12 years than currently predicted.
The report is produced by Professor David Blake from Cass Business School, alongside fellow academics Professor Andrew Cairns fro, Heriot-Watt University in Edinburgh and Professor Kevin Dowd of Nottingham University Business School.
More specifically, the study analyses existing mortality data for men in England and Wales, focused primarily on the Government Actuary's Department, the Pensions Commission and the Office for National Statistics, and finds by applying a ‘fan chart' to the Cairns-Blake-Dowd model - which charts certain and uncertain parameters affecting true statistics - males reaching the age 65 in 2050 would on average live for another 26 years, which is six years more than currently predicted while the upper limit of potential life expectancy being a further 32 years or 12 years more than currently predicted in existing mortality assumptions.
Reaching the calculations applied to these charts is somewhat complex, but ‘fan chart' tables presented within the study (click on the chart shown below to view chart) indicates true mortality assumptions for 65-year old males in 1982 were slightly higher than the 10% ‘prediction interval' initially applied in early modelling but then widened significantly from the predicted models of that time.
Based on these findings, the Pensions Institute has produced data suggesting expected future lifetime limits will significantly increase, projections become even more uncertain as timelines lengthen, and longevity can therefore be can be as much as 12 years out in its true versus predicted modeling.
Conclusions of the report state: "We would stress although our results are based on a model calibrated on UK male mortality experience, we have every reason to expect that similar findings would be obtained for both males and females for any comparable countries. Thus, our findings have disturbing implications for the health, pensions and life insurance industry in many countries, and for public policy generally."