Hewitt Associates believe that increased life expectancy as a result of a smoking ban could add £20 billion to pension scheme deficits. The company believe that the smoking ban is good news for the health of the country, as it should mean that people will live longer, but they will also expect to receive a pension income for longer, which will affect the cost of pensions making them more expensive.
Research has found that the smoking ban could increase the pension gap, while at the same time increase the annual costs of final salary schemes, as figures have shown that an average improvement of one year in life expectancy, increases aggregate deficit of the FTSE 100's pension funds by as much as £15 billion to £20 billion.
Our view
Valid point - as more of us live longer, pension benefits will become more expensive. We will need to save more and our emloyers will need to pay more in to pensions for us.
Expect State Pension Ages to increase. Soon, we will all be working to age 70!