“A decade on from the original Marmot review, it continues to hold that the more favoured people are, socially and economically, the better their health on average. “Health Equity in England: Marmot Review 10 Years On” highlights how this gap has materially widened over the last decade. At Club Vita we have been seeing a similar, concerning, pattern: the more economically comfortable pensioners in the UK have continued to see life expectancy rise over the past decade whilst their more deprived counterparts have seen minimal increases.”
Professor Sir Michael Marmot’s research highlights two key issues for pensions:
1. “For society, the challenge of linking state pension age to life expectancy: For many decades life expectancy rose steadily rose without any equivalent increase in state pension age. A need to “balance the books” led to legislation to link future rises in state pension age to changes in life expectancy. However, what happens when the life expectancy stalls or even decreases? Do we continue to increase state pension age or leave it untouched? This decision is harder when we have widening inequalities in life expectancy, as those most reliant on the state pension are liable to also be the shortest lived. Without addressing health inequalities at source, is there a risk that the attempt to plug a leak in state pension funding may be thwarted by the increased welfare payments made to the most disadvantaged during the period when state pensions have been deferred.”
2. “For DB pension schemes, the flaw of relying on headline trends: Those responsible for scheme funding need to be alert to the risk of using average increases in life expectancy for funding projections. This is what many pension schemes are doing by virtue of adopting an unadjusted version of the “CMI model”. For most schemes the lion’s share of scheme liabilities (and therefore risk) lies with the most affluent individuals. It is these individual who have been most resilient to the recent stalling in national life expectancy. Failing to reflect the socioeconomic landscape of the scheme membership risks underestimating the cost of providing benefits.”
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