Life expectancy for 65-year-olds records dramatic increase

The life expectancy of pensioners has increased dramatically over the past decade, according to figures out yesterday which will have huge implications for the life and pensions industry and will fuel calls for later retirement dates.

More older people are living longer, according to a report by the Actuarial Profession (AP), the trade body for actuaries, who advise insurers on long-term trends.

The AP said that 11 years ago about 181 of every 10,000 male pensioners aged 65 had died within one year. Its latest figures for 2002 showed that as few as 129 had died within the next 12 months - an improvement of 29 per cent. This improvement was even more pronounced among women, with only 74 out of 10,000 dying within the year compared with 110 in 1994 - 33 per cent better.

The report, by the Continuous Mortality Investigation (CMI), a research body of the AP, found that the progress became less with older pensioners, although it was still marked.

CMI said there were huge financial implications of any improvement in mortality in terms of the financing of pensions scheme and the debate over extending retirement ages.

Brian Ridsdale, the chairman of the CMI, said: "Mortality projections are extremely significant for government, life insurers and pension trustees, among others, in terms of managing social security and occupational pension costs."

However, it broke with tradition and decided not to publish projections, stressing the "uncertainty surrounding projections of future mortality".

The profession was criticised in a Treasury review this year led by Sir Derek Morris and commissioned after the near-collapse of Equitable Life. The report highlighted weaknesses in the regulation of the actuarial profession.

Mr Ridsdale said: "Life expectancy has improved dramatically over recent decades but all estimates of future mortality carry considerable uncertainty.

"Issues of individual choice, such as diet, smoking or drugs, have the potential to slow down or even reverse mortality improvements. Individuals, by making choices, have a big impact on how long they live."

The authors of the report said the biggest improvements in mortality occurred for people born in the mid-1930s, who were aged in their mid-60s during the period on which the tables are based. They said nobody can confidently predict whether or not such improvements will continue into the future.

Some health experts say that modern diets, which have resulted in growing levels of obesity among certain population groups, and high rates of smoking among younger women, could limit life-expectancy improvements in the years ahead.

Various pressure groups have suggested that retirement ages be increased to reduce the financial burden on the state, which is caused by a higher proportion of pensioners.