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Last Updated: Thursday, 20 October 2005, 17:09 GMT 18:09 UK
Longer lives impact on pensions
Babies listening to headphones
Even longer to live!
New life expectancy figures have highlighted why the government is keen to make many of its employees work longer before retiring.

Boys born this year will on average live to 86 - three years more than the government estimated just last year.

And the average girl born this year will also live three years longer, to 90 rather than 87.

This underlines why the government is keen to cut the cost of public service sector schemes.

The sudden improvement in life expectancy is revealed in the latest statistics from the Government Actuary's Department (GAD).

The GAD is now assuming that mortality will not slow down as previously thought, but instead improve at a constant rate.

Chris Shaw, a senior statistician at the GAD, explained that his department had made an important change in its estimation of the improvement in long term mortality i.e. in the period beyond the next 25 years.

He said: "We were too pessimistic in the past on mortality improvement. It is a recognition that things have been improving more than we assumed in the past."

One implication of this is that the government is now officially being advised that average life expectancy will improve slightly more over the next 70 years than it did in the last 70 years.

Pension schemes

This week the government won the backing of trade unions for a plan to raise from 60 to 65 the retirement age for new recruits to several big public sector pension schemes.

The schemes cover civil servants, NHS staff and teachers.

The reasons for people living longer are familiar, though difficult to quantify precisely.

Among them are higher standards of living, better nutrition, and advances in medical science.

Changed views

The GAD says there is still considerable debate about whether or not future technical, medical and environmental changes will have a greater or lesser impact on mortality than they did in the past.

Elderly couple
How many more years?

Previously many experts had assumed that the improving trend would in fact slow down.

But the fairly constant increase in mortality and life expectancy has now been going on for two decades.

This has forced a re-think among some demographers and other population experts.

Not all agree with this outlook.

Recently the actuarial profession - made up of people who advise pension funds and insurance companies on life expectancy - refused for the first time to make an official estimate of how life expectancy would improve in the future.

It said individual choice, such as diet, smoking or drugs had the potential to slow down or even reverse mortality improvements.

But if this view is wrong and the GAD is correct then in the future people will be living even longer.

However more accumulations in life expectancy will be fairly slow.

On current projections the GAD believes it won't be until 2053 that a newly born boy can expect to live until he is 90.

And by then newly born girls will be living only slightly longer, to 92.

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