Launch of ILC-UK Factpack, Ageing, longevity and demographic change, Supported by Legal & General his important briefing event, for journalists and senior policy-makers and opinion formers, set out the latest evidence on longevity and explore the extent to which government and business (financial services industry) is responding to the challenges. We will consider the extent to which longevity is influencing government and business decisions and how media and policy-makers can help to ensure that important longevity issues are taken into account. For example, the Government has set out plans to increase the state pension age to 66 years from 2018, and 67 years from 2026. They have also announced plans to automatically link state pension age with increased longevity. Whilst the driver of change has partly been the need for Government to cut spending and make fiscal savings, there is also a recognition that people will be spending an increasing proportion of their lives in retirement. Although we may be living longer on average, many are likely to be doing so in poor health. In parts of the country life expectancy is much lower than the UK average. In addition, on 26th June the Government will announce its latest spending review. The impact of future spending demands of an ageing society will undoubtedly influence this review so the event will consider the extent to which Government’s current spending priorities have adequately taken into account long term demographic change and how the private sector can contribute. The event took place just after the launch of the latest Office of Budget Responsibility fiscal sustainability report which set out the long term impact of ageing on fiscal sustainability. In its 2012 report, the OBR said; “The public finances are likely to come under pressure over the longer term, primarily as a result of an ageing population.” ILC-UK launched a new factpack, Ageing, longevity and demographic change, which has been produced with the support of Legal & General. The factpack will help those with an interest in population ageing and longevity to quickly access key, relevant statistics. Speakers: Baroness Sally Greengross, ILC-UK; Kerrigan Procter, Legal & General; Joseph Lu, Legal & General; Professor Les Mayhew, Cass Business School; Professor Michael Murphy, London School of Economics; Tim Gosden, Legal & General; David Sinclair, ILC-UK.

1. Longevity, health and public policy
How should policy-makers respond
to increased longevity?
Monday 22nd
July 2013
This event is kindly supported by
#LivingLonger

2. Welcome
Baroness Sally Greengross
Chief Executive
ILC-UK
This event is kindly supported by
#LivingLonger

3. Dr Kerrigan Procter
Managing Director, Annuities
Legal & General
Welcome
This event is kindly supported by
#LivingLonger

4. Joseph Lu
Head of Longevity Risk Team
Legal & General
The facts. The impact of longevity
on UK population
This event is kindly supported by
#LivingLonger

5. Longevity – Three Key
Challenges
July 2013
5
Joseph Lu
Head of Longevity Risk Team, Legal & General

6. Life expectancy at birth for Developed Nations
(1970 to Current)
For England & Wales,
•Male life expectancy at birth has increased from 69 years (1970) to 79 years (2011)
•Female life expectancy at birth has increased from 75 years (1970) to 83 years (2011)
6
Background
Source: Human Mortality Database (www.mortality.org)

7. Life expectancy at age 65
(1970 to Current)
7
Background
Source: Human Mortality Database (www.mortality.org)
For England & Wales,
•Male life expectancy at age 65 has increased from 12 years (1970) to 18 years (2011)
•Female life expectancy at age 65 has increased from 16 years (1970) to 21 years (2011)

8. Number of people above age 65 will rise
(2013 to 2043)
8
Background
•Nearly 60% rise in next 30 years
•6.5m more people
Source: Office for National Statistics

9. 9
Challenge 1: Disability
•Of every year of increase in life expectancy…
•3 months spent with disability
Source: Figures derived from Murray et al. (2013). UK health performance: Findings of the Global Burden of Disease Study 2010.
Lancet;381(9871):997-1020

10. 10
Challenge 2: Health & Care Costs
* HMRC Survey of personal income 2010/2011 (employment income, excluding other investments)
Source: Health Economics Research Centre, University of Oxford for the Alzheimer’s Research Trust. Dementia 2010: The prevalence,
economic cost and research funding of dementia compared with other major diseases. Executive Summary.

11. 11
• 87% Final Salary pension schemes now closed.
• Defined Contribution’s 5-15% salary contribution considered insufficient.
• Our experience shows that average annuity pot size is about £30-35K,
giving about £1-3K per year of annuity depending on individuals and market
conditions.
• The minimum annual income for retired people is about £15,000 and to live
comfortable they would need more. **
• DWP – 10.7m to experience inadequate income.
Challenge 3: Pension Provision
Source: Select Committee on Public Service and Demographic Change, House of Lords. (2013). Ready for ageing? The Stationery Office Ltd.
** Joseph Rowntree Foundation.

12. 12
5x
Source: ONS House Price Index
Challenge 3: Pension Provision
*Source: Select Committee on Public Service and Demographic Change, House of Lords. (2013). Ready for ageing? The Stationery Office Ltd.

13. 13
Increasing longevity forces us to
rethink

14. 14
This presentation contains confidential and proprietary information of Legal & General PLC (“L&G”). The presentation, and any
opinions on financial products it contains, may not be modified, sold, or otherwise provided, in whole or in part, to any other person or
entity without L&G's written permission.
L&G makes no representations as to the accuracy or completeness of any of the information in this presentation and any liability on
the part of L&G in relation to the inaccuracy or incompleteness of the information is excluded to the extent permitted by law. Nothing in
this presentation amounts to an offer, promise or advice.

15. Professor Les Mayhew
Professor of Statistics
Cass Business School and ILC-UK Advisor
Increasing Longevity – the good
news and bad
This event is kindly supported by
#LivingLonger

16. 16
Increasing longevity
– the good news and bad
Les Mayhew Cass
Business School Faculty
of Actuarial Science and
Insurance
ILC-UK Fact pack launch
July 2013

17. 17
Longevity –
Strategic issues arising
• The economy is flat but given an ageing population should
we really be surprised?
• Average health status falls in an ageing population but can
this be altered or delayed?
• Are available demographic solutions like increased
migration or fertility realistic?
• What is the economic impact of an ageing population on
GDP, productivity, economic activity rates, tax revenues,
pension age?
• To what extent might improved health expectancy
overcome the economic downsides of ageing versus other
economic levers?
• If health is an important factor what are the main threats to
health and what can be done?

18. 18
Impact of population ageing in the
labour market
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
1970 1980 1990 2000 2010 2020 2030 2040 2050 2060 2070
year
ratioofpopulationaged20-64topopulation
aged65+
The dependency ratio measures the number of working age to people above
retirement age. This chart shows that the ratio turns sharply down after 2006
and will continue to fall at least until 2040 putting further pressure on
pensions.

19. 19
0
1
2
3
4
5
6
7
8
50 55 60 65 70 75
Age
Ratioofadultpopulationbelowgivenagetothe
numberabove
2010
2030
State pension age
A) Joint state
pension age
in 2010 was
62.5 years
B) State pension
age in 2030 will
be 67 years
Each curve represents
the ratio of the
population between age
20 and the age on the
horizontal axis in 2010
and 2030. For the same
ratio to apply in 2030 as
in 2010, state pension
age needs to be 67
years.

20. 20
0
1
2
3
4
5
6
7
8
50 55 60 65 70 75
Age
Ratioofadultpopulationbelowgivenagetothe
numberabove
2010
2030
Ability to work for longer?
A) Joint state
pension age
in 2010 is
62.5 years
B) State pension
age in 2030 will
be 67 years
Joint male and female
health expectancy at
birth is higher than
current pension age but
below future pension
age. Poor health in
later years will
increasingly become a
constraint on ability to
work for longer.
Health
expectancy
at birth

21. 21
0
1
2
3
4
5
6
7
8
50 55 60 65 70 75
Age
Ratioofadultpopulationbelowgivenagetothe
numberabove
2010
2030
Ability to work for longer?
A) Joint state
pension age
in 2010 is
62.5 years
B) State pension
age in 2030 will
be 67 years
Health
expectancy
at birth
Although default
retirement age
scrapped, how can
age related disability
and pressure to work
for longer be
reconciled?

22. 22
Influences on labour market participation
among people aged 50- 59 and 60-69
The biggest single factor predicting whether economically active or not is your
health. Male cohabiting home owners with no caring responsibilities are also
predictive of economic activity. Post-60 these factors weaken as people retire
but good health remains the most influential of these factors (data source:
ELSA)
factor or influence
age 50-
59
age 60-
69
education 1.5 0.7
good health 5.2 2.7
no caring responsibilities 1.5 1.3
home owner 2.2 1.3
cohabiting 1.3 1.3
male 1.6 1.9

23. 23
How did we get here and where are
we heading?
60
65
70
75
80
85
90
95
100
1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 2060 2070 2080
yearlifeexpectancyatbirth
Japanese
females in 2009:
at birth 86.4 yrs
UK males and
females:
at birth 80.3
0
10000
20000
30000
40000
50000
60000
70000
80000
90000
100000
0 10 20 30 40 50 60 70 80 90 100 110
age
numberofsurvivors
1950
2010
The left hand panel shows how the chances of survival in 1950 compared
with 2010 have improved significantly. In the right hand panel life
expectancy has been extrapolated to show how the trend is expected to
develop over the next decades, flattening off towards the end of the
century.
Flattens
off here

24. 24
Changes to the modal age of death
between 1980 and 2010
Postponement of death is reflected in changes to the modal age of death in
1980 was 76 years and in 2010 89 years. By 2030 it will be 93 years. Trend
data show that annual number of deaths has fallen steadily since the 1970s
from around 680k to 550k, so is death a dying business?
0
5,000
10,000
15,000
20,000
25,000
0 10 20 30 40 50 60 70 80 90 100 110
age
numberofdeaths
1980
2010
Modal age of death was 76 in
1980 and 89 in 2010. By
2030 it will be 93
500,000
550,000
600,000
650,000
700,000
1970 1975 1980 1985 1990 1995 2000 2005 2010 2015
year
annualnumberofdeaths

25. 25
Gender differences in life expectancy at
age 30
The gender gap in life expectancy at age 30 is closing ~ 5.7 years in 1970
(A) compared with 3.8 years in 2009 (B). If extrapolated trend lines
converge around 2030.
35
40
45
50
55
60
1950 1960 1970 1980 1990 2000 2010 2020 2030
year
lifeexpectancyat30
Females
Males
A
B
A major factor has been
changes in male
occupation and the
falling prevalence of
smoking. E.g. in 1948
80% of males smoked.
Today only it is about
21% - approximately the
same as for women.

26. 26
Estimating the economic impacts of
improvements in health
As state retirement age shifts right so a higher proportion of people will not be fit to work but
neither will they be eligible for the state pension. In general if life expectancy increases faster
than healthy life expectancy grey area grows in size. The larger it is the greater are health and
social care costs, benefit spend and lost productivity. Meanwhile the survival frontier is
moving to the right.
healthy
dead
Sick
disabled
State pension
age
Chronic disease fills
much of this space
especially in older
adults whilst co-
morbidity – the co-
presence of more
than one chronic
disease- increases
with age. Dementia is
a problem in the
oldest old

27. 27
Estimating the economic impacts of
improvements in health
As state retirement age shifts right so a higher proportion of people will not be fit to work but
neither will they be eligible for the state pension. In general if life expectancy increases faster
than healthy life expectancy grey area grows in size. The larger it is the greater are health and
social care costs, benefit spend and lost productivity.
healthy
dead
Sick
disabled
State pension
age

28. 28
Expected life
=
expected healthy working life + expected unhealthy working life + expected healthy
retired life + expected unhealthy retired life
Uses following identity:
Assumptions
• Those of working age will either work (and receive a wage) or are
economically inactive
• Unhealthy lives receive health & social care and benefits as per
current benefit rules
• All retirees receive basic state pension
• The economically inactive population is in caring roles, unpaid work,
full time education or in leisure
Macro economic model
overview

29. 29
Model overview
LE & HLE
Sick/disabled
population
Economically
active population
GDP, GDP p. capita
Demography
Activity rate
Health trends
Wage
productivity
Public
expenditure
on health and
welfare
Tax rate
Net income
from work
Non-wage
GDP
(dividends,
rents,
royalties etc)
Income from work
Benefits &
pensions

30. 30
Sensitivity analysis
– changes in one variable at a time
Effect of a 1 year increase in life expectancy or health or a 1% increase in wage
productivity, pensions, benefits or population variables on GDP and average tax
rates. Increases to healthy working life have the greatest effect on GDP and
reducing taxes.
quantity
GDP %
change
difference in
tax rate (%)
life expectancy increases 1 year -1.6 1.7
healthy working life increases 1 year 2.7 -2.6
healthy retired life increases 1 year 0 -0.7
participation rate increases 1% 1.6 -0.5
wage productivity increases 1% 1 -0.3
pension increases 1% 0 0.2
benefits in retirement increases 1% 0 0.03
benefits in working age increases 1% 0 0.1
population increases 1% 1 0

31. 31
Where are health improvements
going to come from?
We can
• Reform health care
• Make changes to life styles
• Improve the economy

32. 32
Where are health improvements
going to come from?
Reform health care
• Changes in healthcare delivery
• Re-balancing of priorities
• More emphasis on prevention
• Changes to end of life care

33. 33
Where are health improvements
going to come from?
Make changes in life styles
• Diet
• Exercise
• Safer work places
• Smoking cessation

34. 34
Relationship between gap in life expectancy and
gender difference in smoking prevalence
y = 0.1899x + 3.5448
R2
= 0.7489
0
2
4
6
8
10
12
14
0 5 10 15 20 25 30 35 40 45
prevalence gap (%)
LEgap(years)
Sources: HMD and World Health
Organisation Tobacco Free Initiative, 2011
Ukraine
England
& Wales
France
Japan
Sweden

35. 35
Where are the health
improvements going to come from?
Improve the economy
• Increase GDP
• Reduce health inequalities

36. 36
Source: Cass Business School/ILC-UK Key:
A Using value of home or other
assets
B Disability Linked Annuities
C Insurance products
D Personal Care Savings Bonds
£0 £5000 £10,000 15,000 £20,000 £25,000 £30,000
Net income p.a.
£250k
£225k
£200k
£175k
£150k
£125k
£100k
£75k
£50k
£25k
£0k
Assets
S
e
l
f
-
f
u
n
d
e
r
s
Paying for social care
B
D
Personal Care Savings Bonds
– a new way of saving towards
social care in later life
Les Mayhew and David Smith
June 2013
08Fall
C
A

37. 37
Longevity – So is it good news or
bad?
• Good news is that we are all living longer but longevity
needs to be managed to protect living standards
• Not to do so will increase taxes, squeeze public expenditure
and pensions and increase immigration pressures
• Although higher population means greater GDP it does not
mean higher living standards
• We need to recalibrate our approach to health care – the
importance of prevention and how health care is delivered
• The bad news is that the demand for social care will increase
and this has to be paid for from our own resources
• An ‘active ageing scenario’ helps to mitigate these problems
by enabling people to work longer in better health

38. 38
THE END

39. 39
References (1)
Mayhew, L. and D,Smith (2013) Personal Care Savings Bonds - a new way of saving towards social care in
later life. ILC-UK. http://www.ilcuk.org.uk/images/uploads/publication-
pdfs/Personal_Care_Savings_Bonds.pdf
Mayhew L.D., D.Smith (2013 Under review), 'Gender convergence in life expectancy and the postponement
of death',
Mayhew, L. and B. Rickayzen (2012) The ageing population: Crunch time for Government reforms. Economic
Affairs Vol 32(2), 96-100
Mayhew, L. (2012) The UK Care Economy – Improving outcomes for carers. Published by Carers UK.
https://www.carersuk.org/professionals/resources/research-library/item/2837-the-uk-care-economy-
improving-outcomes-for-carers
Mayhew, L. and D. Smith (2011) Human survival at older ages and the
implications for longevity bond pricing. The North American Actuarial Journal (NAAJ)–Vol 15(2).
http://www.soa.org/library/journals/north-american-actuarial-journal/2011/no-2/naaj-2011-vol15-no2.aspx
Mayhew, L., M. Karlsson, and B. Ricklayzen, B. (2010) The Role of Private Finance in Paying for Long Term
Care. The Economic Journal, Vol 120, Issue 548, F478–F504, November 2010.
http://onlinelibrary.wiley.com/doi/10.1111/j.1468-0297.2010.02388.x/pdf
Mayhew, L. (2009) On the effectiveness of care co-ordination services aimed at preventing hospital
admissions and emergency attendances. Health Care Management Science. Vol 12(3), 269-284, DOI
10.1007/s10729-008-9092-5.
http://www.ncbi.nlm.nih.gov/pmc/articles/PMC2713026/pdf/10729_2008_Article_9092.pdf
Mayhew, L. (2009) Increasing Longevity and the economic value of healthy ageing and working longer.
Commissioned report for HMG Cabinet Office Strategy Unit.
http://www.hmg.gov.uk/media/33715/economicsofageing.pdf

40. 40
References (2)
Mayhew, L., J. Richardson, B. Rickayzen (2009) A study into the detrimental effects of obesity on life expectancy
in the UK. Actuarial Research paper, Cass Business School.
Karlsson, M., L. Mayhew, B. Rickayzen (2008), In Sickness and in Health? Dynamics of Health, Cohabitation in
United Kingdom. In Sandra Dawson and Zoë Slote Morris (ed.), Future Public Health: Burdens, Challenges and
Opportunities, Cambridge: Palgrave Macmillan, ISBN 9780230013599.
Karlsson, M., L. Mayhew, B. Rickayzen (2008), In Sickness and in Health? Dynamics of Health, Cohabitation in
United Kingdom. In Sandra Dawson and Zoë Slote Morris (ed.), Future Public Health: Burdens, Challenges and
Opportunities, Cambridge: Palgrave Macmillan, ISBN 9780230013599.
Mayhew, L., and D. Smith (2008), Using queuing theory to analyse the Government’s 4-h completion time target
in Accident and Emergency departments. Health Care Management Science, 11(1), 11-21
Karlsson, M., L. Mayhew, B. Rickayzen (2007), Long term care financing in 4 OECD countries: fiscal burden and
distributive effects. Health Policy, 80(1), 107-134
Mayhew, L. and D. Blake (2006) On The Sustainability of the UK State Pension System in the Light of Population
Ageing and Declining Fertility. Economic Journal, 116(512), F286-F305
Karlsson, M., L. Mayhew, R. Plumb., and B. Rickayzen. (2006) Future costs for long-term care: Cost projections
for long-term care for older people in the United Kingdom. Health Policy, 75(2), 187-213
Mayhew L., Alder, J., Moody, S., Morris, R., Shah, R. (2005) The chronic disease burden – An analysis of health
risks and health care usage. Cass Business School London, Special Report, 56pp
http://www.sias.org.uk/siaspapers/search/view_paper?id=Chronic
McKellar, L., D. Horlacher, T. Ermoliev, and L. Mayhew (2004) The Economic Impacts of Population Ageing in
Japan. Edward Elgar Publishing , ISBN 978-1843763604
Mayhew, L. (2003) Disability-Global Trends and International Perspectives. Innovation: The European Journal of
Social Science Research. 16(1), 3-28

41. Professor Michael Murphy
Professor of Demography
London School of Economics
Healthy ageing: an international
perspective
This event is kindly supported by
#LivingLonger

42. Healthy ageing: an internationalHealthy ageing: an international
perspectiveperspective
Mike Murphy, London School of Economics
Prepared for Policy Debate: Longevity, health and
public policy. How should policy-makers respond
to increased longevity?, Monday, 22nd July 2013

43. Britain in EuropeBritain in Europe
• The British population is growing more
rapidly than in many EU countries. Between
2001 and 2011, the population of England
and Wales grew by 7.3% compared with
3.5% in EU-27 (excluding UK). Population
growth is also accelerating; an increase of
3.8 million compared with 1.6 million in the
previous decade 1991-2001.

44. Main trends among olderMain trends among older
peoplepeople
Year
2011 2021 2031 2041
Both sexes (000s)
50 & over 11,693 13,584 14,753 16,070
65 & over 5,862 7,001 8,544 9,631
85 & over 970 1,211 1,694 2,273
All ages 31,833 34,110 36,093 37,794
Support ratioa 3.93 3.29 2.76 2.53
M:F 85 & overb 49.6 62.5 70.0 72.3
Source: ONS Population projections 2010-based.
Notes: a
Number of persons aged 15-64 for each person aged 65 & over.
b
Number of males per 100 females aged 85 and over.

45. Years of life expectancy gained byYears of life expectancy gained by
age in subsequent decade, Englandage in subsequent decade, England
and Wales, based on ONS dataand Wales, based on ONS data
MalesMales FemalesFemales

46. Successful agingSuccessful aging
• “avoidance of disease and disability, maintenance
of high physical and cognitive function, and
sustained engagement in social and productive
activities” (Rowe and Kahn 1997, p. 439).
• The World Health Organization (WHO) defines active
ageing as “. . . the process of optimizing
opportunities for health, participation, and security
in order to enhance quality of life as people age”
o participation,
o health
o security

47. Health statusHealth status
• Improvements in mortality have not been
matched by corresponding improvements in
health status. Although the evidence is more
mixed and forecasts even more difficult to
make than in the case of mortality, there is
little indication of improvements in health
comparable to those of about 3% per
annum observed for mortality.

48. Health needsHealth needs
• The additional years of life gained are
concentrated at older ages, where
prevalence of degenerative diseases such as
dementias affects a high fraction of the
population. On balance, the likelihood is that
number of years spent in good health will
increase over time, but it less clear whether
the number of years and the proportion of
remaining life spent in poor health or with
disabilities will increase or decrease
(Wanless, 2002).

49. Leading causes of death by sex inLeading causes of death by sex in
2011 & 2001, England and Wales2011 & 2001, England and Wales

50. 2012 European Year for2012 European Year for
Active Ageing and SolidarityActive Ageing and Solidarity
between Generationsbetween Generations

51. Healthy Life Years at birthHealthy Life Years at birth
in 2010in 2010
Jagger et al. 2013. Mind the gap—reaching the European target of a 2-year increase in healthy life years in the
next decade. European Journal of Public Health, 1–5

52. EmploymentEmployment
• The number of people of state pension age and
above in employment has nearly doubled over the
past two decades, from 750 thousand in 1993 to 1.4
million in 2011. Older workers are more likely to be
self-employed than younger workers and around
two-thirds are part-time usually with the same
employer. Men working later in life tend to be in
higher skill jobs, while the reverse is true for women.

53. ParticipationParticipation
• Reduced mortality especially among men has
increased the proportion of older people who
remain married and reduced the proportion of
women who are widowed.
• Trends are also affected by the marital histories;
those born in the 1940s had the highest rates of
marriage ever experienced.
• These cohorts are also more likely to have children
as potential informal carers. However, this
favourable trend will reverse as those born in the
1960s enter the older age bands – implications for
informal care.

54. Feeling lonely: by age group andFeeling lonely: by age group and
sex, 2009–10 Englandsex, 2009–10 England
Measuring National Well-being - Older people and loneliness, 2013
Jen Beaumont Office for National Statistics

55. Social CareSocial Care
• Many of those in very poor health will require long-
term care institutional care, especially those
suffering from Alzheimer’s disease, which is a major
driver of demand.
• About 300 thousand people, 4.5% of those aged 65
and over, in England in 2010 were living in care
homes; a further one million were receiving formal
community care and two million receiving informal
care (Commission on Funding of Care and Support,
2012, Vol. II).

56. Inequalities: Period lifeInequalities: Period life
expectancy for men at 65: by NS-expectancy for men at 65: by NS-
SEC, 1982 to 2006SEC, 1982 to 2006
Source: Longitudinal Study, Office for National Statistics
NS-SEC Period Increase
1982-86 2002-06 Years Per
cent
1 Higher managerial and professional 15.2 18.8 3.6 23.7
2 Lower managerial and professional 15.1 18.2 3.1 20.5
3 Intermediate 13.9 17.5 3.6 25.9
4 Small employers and own account
workers
14.0 17.5 3.5 25.0
5 Lower supervisory and technical 13.4 16.4 3.0 22.4
6 Semi routine 12.9 15.6 2.7 20.9
7 Routine 12.9 15.3 2.4 18.6

57. Conclusions: Some implicationsConclusions: Some implications
for the Twentieth-first centuryfor the Twentieth-first century
Some encouraging signs in health status, but even so highly likely
there will be an absolute increase in years spent in poor health
and possibly, the proportion also
Older people's perceptions of health status are often more
optimistic than “objective” measures
Although “healthy ageing” and “well-being” are on the political
agenda, actions so far have been limited
Need to acknowledge:
shifts from acute to social care
changing patterns of chronic disease
average age of those needing acute and social care will
increase
“Tipping point” for availability of informal care will occur in near
future.

58. References and sourcesReferences and sources
• Age UK. various. Later Life in the United Kingdom, available at http://www.ageuk.org.uk/Documents/EN-
GB/Factsheets/Later_Life_UK_factsheet.pdf?dtrk=true
• Banks, James, James Nazroo, Andrew Steptoe. 2012. The Dynamics of Ageing: Evidence from the English
Longitudinal Study of Ageing 2002-10 (Wave 5), available at http://www.ifs.org.uk/ELSA/reportWave5
• Commission on Funding of Care and Support. 2012. Fairer Care Funding: The Report of the Commission on
Funding of Care and Support (3 Volumes) “The Dilnot Commission”, available at
http://webarchive.nationalarchives.gov.uk/20130221130239/http:/dilnotcommission.dh.gov.uk/
• Hills, John. 2010. An Anatomy of Economic Inequality in the UK - Report of the National Equality Panel. CASE
report No. 60 http://sticerd.lse.ac.uk/dps/case/cr/CASEreport60.pdf
• House of Lords Select Committee on Public Service and Demographic Change. 2013. Ready for Ageing? Select
Committee on Public Service and Demographic Change Report of Session 2012–13 Report, available at
http://www.publications.parliament.uk/pa/ld201213/ldselect/ldpublic/140/140.pdf
• ILC-UK. 2013 . Ageing, longevity and demographic change, available at
http://www.ilcuk.org.uk/index.php/publications
• Marmot, M et al. 2010. Fair Society Healthy Lives (The Marmot Review). Strategic review of health inequalities in
England post-2010, available at http://www.instituteofhealthequity.org/projects/fair-society-healthy-lives-the-
marmot-review
• Office for Budget responsibility. 2013. Fiscal sustainability report – July 2013 available at
http://budgetresponsibility.independent.gov.uk/fiscal-sustainability-report-july-2013/
• Pensions Commission. 2005. A New Pension Settlement for the Twenty-First Century. The Second Report of the
Pensions Commission, available at http://webarchive.nationalarchives.gov.uk/
+/http:/www.dwp.gov.uk/publications/dwp/2005/pensionscommreport/main-report.pdf
• Sweiry, Daniel and Maxine Willitts. 2012 Attitudes to age in Britain 2010/11. Department for Work and Pensions. In-
House Research No 7, available at http://research.dwp.gov.uk/asd/asd5/ih2011-2012/ihr7.pdf

59. Tim Gosden
Head of Strategy for Individual Annuities
Legal & General
Role of the financial service
industry in tackling the challenges
This event is kindly supported by
#LivingLonger

60. Role of the Industry in
tackling the challenges
July 2013
60
Tim Gosden, Legal & General
Head of Strategy, Pension Annuities

61. Key Issues
61
DC pension provision
Underestimating life expectancy
Income in retirement
Phased/deferred retirement
Role of the industry

62. DC pensions
62
87% Final Salary pension schemes now closed
Defined Contribution’s 5-15% salary contribution
2012 average UK pension pot to buy an annuity was
£33,000* (best income £1,900 per annum)
Q1 2013 - 80% of pension pots below £50,000*
Fund to purchase maximum basic state pension
£110pw = £190,000
97% of Legal & General pension annuities are level
with no inflation proofing
*Source ABI statistics

63. Life expectancy
63
Men aged 50-60 underestimate life expectancy by
two years, while women underestimate by four
years*
ONS male aged 65, life expectancy 83.2, female
85.8**
Legal & General estimate for a 65 year old DC
member shopping around is on average to age 90
DC members, live on average 25 years in retirement
* Institute of Fiscal Studies
**ONS Interim Life Tables 2009 – 2011 England and Wales

64. Income in Retirement
64
Average UK working income £19,600pa*
Average UK retirement income (private and state)
£11,600pa*
Average income people would feel comfortable
living on at 70 years-old is £25,200** (cost circa
£500,000)
1 in 5 saving nothing at all and 1 in 5 retiring with
debts averaging £20,300**
The situation may only get worse
*HMRC Survey of personal incomes 2010/2011 (employment incomes,
excludes other investments)
** Scottish Widows 2013 UK Pensions Report

65. Phased/Deferred Retirement
65
Annuity and Drawdown Contracts sold
0
50000
100000
150000
200000
250000
300000
350000
400000
450000
500000
2008 2009 2010 2011 2012
Annuity
Drawdown
Source: ABI statistics

66. Retirement at 70 will be the 'new
norm'
66
“For a whole generation in their forties and fifties
now, it is probably already too late. They are going
to have to work to 70 or beyond before they can
afford to retire.
For people in their twenties and thirties, there is still
time to make a significant difference, but only if they
can be persuaded to engage with their retirement
savings.”
Tom McPhail, Hargreaves Lansdown. Telegraph, June 2013

67. Sting in the Tail
67
Healthy, 32%
Circulatory
diseases, 10%
Other circulatory
diseases&
diabetes, 21%
Co-morbid
diseases, 6%
Neurological
diseases;
MRSA; Arthritis,
15%
Cancer (incld.
Benign
neoplasm), 7%
Respiratory
diseases, 4% Other,
5%
For men aged 60-69, only 32% healthy*
Care funding in later life on average £750pw nursing home fees**
*Preliminary analysis performed by Legal & General using data from the General Practice Research Database. Data includes >1.5m patients registered
with a general practice surgery in England (2007). Diseases examined include stroke, IHD, lung, colo-rectal and/or prostate cancer, Alzheimer’s disease
etc. **Laing & Buisson care of elderly people market survey

68. Role of the industry
68
Education and awareness for all age groups
•Explain retirement and the stark realities we all face.
•Tell people the target minimum retirement income they need
•Reinforce the need for young people to act now and start saving
•Encourage more people to shop around for their retirement income
•Explain the benefits of annuities
More flexible regulations to make better use of existing assets
•More flexible income drawdown and annuity regulations so there is access to
available assets for terminal illness/care funding
•Additional tax incentives
•Funds passing down generations
•Improved product design
Improve access to regulated professional advice
•Clearer sign posting to enable access to specialist retirement advice

69. Money isn’t everything!
69
Sardinia, Nuoro Province
‘Blue Zone’ where people live longer and happier lives
than anywhere else.
Nearly10 times the number of centenarians per 1000
people than US.

70. 70
This presentation contains confidential and proprietary information of Legal & General PLC (“L&G”). The presentation, and any
opinions on financial products it contains, may not be modified, sold, or otherwise provided, in whole or in part, to any other person or
entity without L&G's written permission.
L&G makes no representations as to the accuracy or completeness of any of the information in this presentation and any liability on
the part of L&G in relation to the inaccuracy or incompleteness of the information is excluded to the extent permitted by law. Nothing in
this presentation amounts to an offer, promise or advice.

71. Panel Debate and Q&A
Panellist
David Sinclair
Assistant Director, Policy and Communications
ILC-UK
This event is kindly supported by
#LivingLonger

72. Longevity, health and public policy
How should policy-makers respond
to increased longevity?
Monday 22nd
July 2013
This event is kindly supported by
#LivingLonger