Bigger pension income the key to longer life? Almost

28 April 2016

Longevity analysis on almost 50,000 pensioners provides interesting insights

Equiniti, the UK’s largest pension services provider, has undertaken longevity analysis on almost 50,000 pensioners from the public sector who died over the past 36 years, revealing that the larger your pension income the longer you are likely to live.

The analysis found that someone with a pension income between £30k-£35k a year is statistically likely to live over one and a half years longer than someone with a pension between £10k-£15k. However, when income passes over £35k much of the longevity benefit is lost.

The analysis was based solely on pension schemes that are administered through Equiniti’s Compendia software and some of the pensioners may have other income, but the overall conclusion is that for people with pensions of between £10k-35k the larger your income in retirement the longer you will live.

Duncan Watson, Managing Director (Data Solutions) at Equiniti Pension Solutions, says: “The connection between wealth, health and longevity is well established(1). This analysis shows that income in retirement is also an important indicator of a longer life – but up to a point. Those with very large pension incomes(2) did see average life expectancy fall back.”

“The analysis shows that there is a correlation between pension wealth and longevity with people on average living an extra four and a half months longer for every extra £5k they receive in pension income between £10,000 and £35,000.”

“These figures should be of particular interest to trustees of schemes with higher average incomes. It appears as though longevity risk is going to be a bigger issue for these schemes, which means it is likely that trustees will be taking steps to prepare to insure that risk. Data quality is in an important part of the insurance process.”

(1) Link to ONS.GOV.UK

(2) At today’s best standard annuity rates pensioners looking to secure a guaranteed income of £35,000 would need savings of approximately £750,000.



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Notes to Editor:

About Equiniti Pension Solutions

With a heritage dating back to 1836, Equiniti Pension Solutions looks after 8 million public and private sector pensioners; paying around 20% of UK pensioners.

Equiniti Pension Solutions was created when the software expertise of Claybrook was combined with the experience, scale and reach of the Paymaster General.

Today, we deliver complex administration and project services to large and small UK pension schemes through propriety technology: Compendia is our multiple-award winning, leading-edge pensions administration technology platform, developed by pension experts, for administering pension schemes; DataSure software to analyse, cleanse and migrate scheme data; and SuperVal for actuarial valuations of Defined Benefit schemes.


About Equiniti Group

Equiniti keeps things running smoothly behind the scenes for some of the best-known brands and public sector organisations in the UK.

We specialise in providing finely-tuned finance and administration services, as well as smart technology solutions, in complex and regulated markets.

Our services are delivered by 3,500 employees across 29 office locations, enabling us to offer solutions that are flexible, adaptable and scalable.

We are acknowledged leaders in the pension services market and in the share registration market, where our clients include around half the FTSE 100.

Our mission is to make the complex simple.

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