Healthy life expectancy will have “major impacts” for pension policy, says Hargreaves Lansdown, as the latest data shows vast discrepancies between the most and least deprived areas.
Data from the Office for National Statistics shows that in 2020 to 2022, life expectancy at birth in England in the most deprived areas has decreased to 72.6 years for men and 77.7 for women. This compares with 83 years and 86.1 years, respectively, in the least deprived areas.
In 2020 to 2022, healthy life expectancy at birth in the most deprived areas of England was 51.1 years for males and 50.5 years for females. This compares with 70.1 years and 70.2 years in the least deprived areas. This measures health-related wellbeing and represents the average time an individual is expected to live in “very good” or “good” health.
Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, said: “We know that the big increases in life expectancy we’ve seen in recent years are slowing down but this is only part of a much bigger story. The reality is that depending on your circumstances, your life expectancy could vary massively, by around ten years between the most and least deprived areas.
“Added to this is the whole issue of healthy life expectancy. This has a huge impact on our ability to keep working and the data shows the gap has become a yawning chasm, with someone in the most deprived areas of England and Wales having a healthy life expectancy of early fifties at best. These shocking figures have major impacts for pension policy – both for the State and workplace pensions.”
The State Pension age is set to rise to 67 in 2026-28, with further increases to 68 currently under review. While this may be acceptable for those in the least deprived areas of the country, those in the most deprived areas may need to exit the workforce far earlier, explains Morrissey.
“There could be a gap of over a decade that needs to be filled. This would be compounded if the Government were to look to accelerate the State Pension age increase further so it’s an issue that needs to be considered in any further discussions around State Pension.
“Added to this is the impact on people’s workplace pension savings if they are unable to continue in their current role. It’s important for those who can afford it to keep contributing to their pension wherever possible but not everyone can. It shows the importance of enabling extra flexibility to enable people to continue to work in a different role for instance or work in a different way. Such an approach would help more people to continue building their financial resilience for today and tomorrow,” she said.
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