The increase in life expectancy has cost private sector pension companies around £30billion in two years. A report from KPMG has indicated that of the 200 firms analysed, the average life expectancy of the staff has increased by one year since 2005.
The average company pensioner age at 31 December 2006 was 85.2, which is an increase from 84.4 in 2005.
Our view
It is a well documented fact that people with good pensions i.e. people with reasonable income in retirement live longer as they ‘have a will to live’. We expect more pension funding problems and more closures of larger employer company pension schemes. We advise firms to set further funds aside as life expectancy will increase.