The cost of living (too long)
This research is a snapshot of changes to mortality noticed between 1999 and 2002 and it indicates that the average Briton has an increased life expectancy of two years when compared to a similar snapshot taken between 1991 and 1994. Well that sounds good to me, another two years in the bag retirement-wise for all of us will go down very nicely thank you.
But that’s the trouble with data like this. Things are never really what they seem. I read something else this week that is also based on statistical research and shows that we don’t actually die in a uniform and correct fashion that would enable us to count on things like this extra two years that seem to be there for us. These other stats show that longevity has something to do with where you live as much as anything else. I found it worrying to see that 35% of men living in London are likely to die before their seventieth birthday, whereas only 26% of men in the South West will pop their clogs so early. Worse still, it depends on which bit of London you live in with over 48% of men living in Hackney cashing their chips in before the age of seventy. This, of course, brings into sharp relief all these debates that are going on about increasing the retirement age to 70 or 75. Obviously for many people retiring at 70 isn’t going to be an option.
That’s the trouble with averages I guess, it helps us understand the macro stuff, but it's no help to us as individuals when we’re trying to plan things in our own lives. On the macro front, actuaries have calculated that employers will have to chip in a few more billion pounds into pension schemes to allow for the fact that life expectancy has gone up by two years. Our voluntary funded pension savings in the UK may stand at a European record of £1,200 billion, but even so we’ll need to put in an extra few bob to make sure pension schemes remain solvent against the promises they have made in terms of pension benefits.
Even though we’re the most pensioned people in Europe as far as pension funding is concerned, we still have a fairly big ‘black hole’ in terms of unfunded pension promises made to Government employees. According to the NAPF (the National Association of Pension Funds) the unfunded liabilities we’re saddled with for pay-as-you-go pensions for public sector workers amount to something like £470 billion. Worse still, the extra two-years thing looks like adding £50 billion to the eventual bill too. So we’re going to have to fork out over half a trillion pounds from our taxes to pay for these pension promises as people in the public sector go on into retirement. That’s a hell of a black hole in my opinion. Let’s hope they all live in Hackney and not Truro…..
6 August 2004
Any research and analysis included has been provided by us for our own purposes and the results of it are being made available only incidentally.