Age of death for retirees will cluster in the early 90s, study says
Establishing the human ‘sell-by date’ is crucial in order for society to plan for the future
Age at death will increasingly cluster in the 90s and the life expectancy of men and women will converge, according to a study by academics from Cass Business School in partnership with the International Longevity Centre UK (ILC UK). Over the coming decades, men in particular will live longer, increasing the need for the country to face the challenges of an ageing society.
Based on historical mortality data from England and Wales, the researchers developed a new method for forecasting life expectancy – the results will be beneficial to individuals, government policy makers, pension providers and insurers as the new forecasts provide more certainty with which to plan.
Les Mayhew, Professor of Statistics at Cass Business School, said: “We expect that most future growth in life expectancy will come between the ages 70 and 90. Life expectancy beyond 100 years of age is increasing very slowly and so will not contribute as much as was previously thought. As a result, the age at death will tend to increasingly cluster in the 90s and the age of death of men and women will converge.”
One of great success stories in the United Kingdom is that people are living longer and men’s life expectancy is catching up with women’s. Male life expectancy at birth is now almost 80 years, having advanced 14 years since 1950 thanks to reductions in smoking, a decline in hazardous occupations, better health care and higher standards of living.
This success presents the country with a huge economic opportunity if these extra years are spent in prosperity and good health, but significant economic danger if they are not.
Realising the full potential of older citizens of the United Kingdom will be central to the Government’s response to changing economic circumstances and the drive to build a strong, fair economy for the twenty-first century. However, the challenges posed by an ageing society come at a cost in terms of pensions, higher health and social care costs and infrastructural change.
Professor Mayhew said: “The increases in life expectancy also raises important questions, as later retirement requires a capacity to work for longer and it may also mean downsizing one’s home at an earlier stage, with significant implications for the housing market. As a result, we need better information about life expectancy at both the population and individual level to enable better decision making. Policies must be durable, especially anything to do with pensions, health and social care, or housing.”
Chief Executive of the International Longevity Centre UK, Baroness Sally Greengross welcomed the report saying:
“Accurately forecasting life expectancy will be crucial in enabling the Government, society and individuals to properly and prudently plan for the future. Higher standards of living and improving healthcare are clearly beneficial, however, an ageing population requires that detailed provisions are put in place”.
“For these reasons, I welcome this significant piece of research from Cass Business School in partnership with ILC-UK. It is an important and timely contribution to stimulating the debate that is urgently needed around how society supports an ageing population”.
Professor Mayhew and co-author David Smith used a pioneering new mathematical technique known as decomposition - or the 'jam-jar model' - to produce contributions to life expectancy for each 10 year age band (e.g. 70 to 80). The method provides more certainty over which age groups are experiencing significant gains and more accurate information about possible limits to life expectancy.
Talking about the model, Professor Mayhew said: “Each decade of retired life can be imagined as a jam-jar which if filled to the brim with life years would give a maximum of 10 years. As each jam-jar approaches the brim, extra life years are transmitted to the next decade of life in a predictable wave-like fashion until all are full.”
To illustrate this, in 1950, when male life expectancy at 60 in England and Wales was 15 years, the contribution from the decade of life between 80 and 90 was only 9.1% of the total. By 2009, when life expectancy was 22 years, this decade of life contributed 18.5%.
“We already know that average pension pots are small and now must last for longer. As a result, greater responsibility will fall on the individual to make choices, to pay for services and to seek help and advice. Therefore we need better planning tools, including approaches to life expectancy that we have pioneered here, to help to anticipate and mitigate these effects,” added Professor Mayhew.