The Office for National Statistics (ONS) has reported that life expectancy in the UK has ground to a halt and seen no increase for the first time since records began. Men are still expected to live to 79.2, while women’s life expectancy remains at 82.9.
“In terms of private pensions, sponsoring employers who offer defined benefit (DB) schemes should be jumping around with joy. If people aren’t living as long, it means that pensions aren’t paid for as long and it should help mitigate the increasing costs of funding the arrangements.
“With interest rates and gilt yields on the rise, which will also reduce the cost of funding DB pensions, we may see a slowdown in the decline of these schemes, which are seen as the gold standard in the UK. Perhaps wishful thinking, as I believe this ‘good fortune’ has come too late for DB schemes, and their longevity will also not be increasing!”
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