Our third annual report focuses on helping trustees and sponsors to understand the impact of longevity risk and assumptions on their pension schemes.

This topic is becoming more important as pension schemes de-risk their investment strategies and longevity becomes one of the key remaining uncertainties.

This report has been written during an exceptional time in the UK, with a tragically high number of people dying due to Covid-19. Whilst Covid-19 is quite rightly dominating headlines and pension scheme agendas at the moment, it is of course only one of a number of factors that will drive a pension scheme's mortality experience and assumptions.

As well as taking a look at the impact of Covid-19, this report therefore also considers wider mortality trends and takes a look at what might happen in the future.

What’s inside?

• The impact of COVID-19 on the financial position of a defined benefit pension scheme: will the repercussions lead to longer or shorter future life expectancies?
• Our modelling implies that the short-term financial impact for a typical pension scheme of members' deaths in 2020 is likely to be modest, at a fraction of a percent.
• Covid-19 affects different groups disproportionately. We highlight some of the emerging trends.
• The knock-on effects of the pandemic in the medium to long-term may ultimately dominate the consequences of Covid-19, particularly the effects on average life expectancies of a severe recession and changes to UK healthcare provision.
• Longevity insurers and reinsurers are making very little (if any) allowance for Covid-19 in their longevity assumptions at the current time.