The fall in life expectancy for men, revealed this week by ONS, was perhaps not such a big surprise given that more than 130,000 people have sadly lost their lives to Covid-19 over the past 18 months.

Covid-19 is not the only factor in the drop but it is an important one and it may also effect following years' data too.

The Office for National Statistics said the latest statistics showed a decline in life expectancy for men for the first time since the figures began being collected in the 1980s.

Overall average life expectancy at birth fell by nearly 8 weeks in England and 11 weeks in Scotland between 2018 and 2020.

Male life expectancy has fallen back to 79 years, a level last reported for 2012 to 2014. Female life expectancy was 82.9 years, showing virtually no improvement.

We’ve become used to life expectancy rising steadily over the past 40 or 50 years but that period may be coming to an end, or at least seeing a significant pause.

ONS has produced a very interesting blog on the data this week which broadly says the decline is pretty modest and does not mean that most people will not live into their eighties or older. In fact the number of centenarians has increased significantly recently.

So while it is unlikely we will see a major drop in life expectancy, the figures do have potentially a profound impact on Financial Planning and on areas such as annuities, retirement planning and financial plans generally. The actuaries will no doubt be preparing to update their mortality tables in due course so we might see some impact in several areas of financial services, certainly if the trend continues.

Of perhaps most importance is the impact on retirement planning.

The fact is that, according to these statistics, a man who does not receive his state pension until 67 (or older for those retiring in a few years time) can only expect, on average, to live to 79.

So he’s paid national insurance, possibly for 50 years or more, but will only receive a pension for a decade or so.

I’ve written in the past about the significant regional variations in mortality too and these need to be factored in. Life expectancy in some of the poorer areas of Britain is far lower than 79. The gap in life expectancy between the richest and poorest areas of Britain can often be 10 years or more.

The real issue here, is fairness, and the drop in life expectancy underlines the unfairness even more.

The logical next step here is to launch a widespread review into the state pension, how it is accrued and how it is distributed and to whom.

A state pension scheme which no longer serves the poorest or those with impaired health is no longer a good scheme and must be changed.

We all understand that the state pension is a bit of a bet on mortality but, if fairness evaporates, it risks becoming a pension of most benefit to those living in the most affluent parts of the country, something its architects never intended, I would wager.