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Socially distance but keep busy

Bob Champion | Air Later Life Academy
|
30th March 2020
Bob Champion LLA Later Life Academy
"The case for social distancing cannot be questioned. Beyond encouraging this and other measures to restrict the spread of the virus what more can a later life adviser do?"

It’s a rather morbid way to start an article but let’s look at the facts around deaths in the UK, at least for the last year we have the statistics for, 2018.

In round numbers, in 2018 there were 540,500 deaths in the UK; 7,500 of which were under age 30; 111,000 were between ages 30 and 70; and 422,000 were aged over 70. Just under 80% of those deaths were therefore for people aged over 70.

The good news is that recorded deaths for 2020 are running at a lower level than the average of the last three years, however, I think we’re all aware this is the calm before the storm.

The storm is predicted by modelling of the impacts of the coronavirus carried out by UCL to inform the Government. It predicted that if no restrictions were in place coronavirus deaths would be approximately 500,000. That would result in a 100% increase in the number of expected deaths this year. If the measures to combat the virus are restricted to isolate suspected cases, it anticipates the virus will cause 250,000 deaths.

Tighter restrictions to ‘flatten the curve’ will result in a lower number of deaths. Hence the policy to contain the virus through social distancing and other restrictions that have been put in place. A Government spokesperson recently said these measures will be a job well done if the number of deaths is restricted to 20,000; according to another spokesperson, the current restrictions may need to be in place for six months to achieve this. However, for those directly affected those 20,000 deaths are still 20,000 too many.

These will not all be additional deaths of course. Among the coronavirus deaths will be those who would have been among this year’s 550,000 expected deaths (for example, those with terminal cancer). Death may have occurred a few months earlier but will be included in the coronavirus total.

And not all deaths result from illness. 23,000 deaths in 2018 were classified as death through external causes e.g. accidents, poisoning, etc., so if the curve is not flattened we will see an increase in the numbers as well. So, for example, there may not be an ambulance available to get to a serious road accident. If there is and the hospitals are overrun with coronavirus cases who will be available to give the necessary emergency treatment? Similarly, the same will apply to cardiac attacks and strokes. These deaths will not be counted as coronavirus deaths.

The case for socially distancing goes beyond reducing the number of coronavirus deaths.

The Institute of Gerontologists believe too much emphasis is being placed upon age when the impacts of coronavirus are being discussed. No one dies of old age. Sooner or later part of the body deteriorates and no longer functions as it should, leading to death. It may appear to be death through natural causes but in every death a part of the body has failed.

With this in mind, if 80% of expected deaths in any year are among the over 70s a virus that attacks the body functions is likely to result in more deaths among those whose bodies are weakening. That said there are some 80-year olds who will contract and survive coronavirus, and 45-year olds who will not. It is hard to predict who will survive and who will, however those who don’t will predominantly be the elderly.

The case for social distancing cannot be questioned. Beyond encouraging this and other measures to restrict the spread of the virus what more can a later life adviser do?

Many clients will of course be worried. For many it may be the first time that they have had to accept they may die sooner rather than in the distant future. If they follow the guidance, they are unlikely to be among the possible 100,000 of over 70-year olds that will die this year who would otherwise would not. Comparison with the normal yearly death statistics may help to reassure them that their number will not be on the virus. Is now the time to get their affairs in order – Wills? Powers of Attorney? Funeral arrangement/wishes?

The Pandemic has also caused economic turmoil. Equity release interest rates are likely to remain low for some time. So, as an adviser, if you are socially distancing, can you identify those past clients who are currently on high rates of interest that after allowing for early repayment charges would benefit from a transfer to a more modern plan?

Many pensioners now depend upon income drawdown for their retirement income. They could have suffered a 15% or more drop in the investments they hold for this purpose. If they continue to sell off investments to pay their income, they could seriously impair the chances of their income lasting for all of their life. They may have a cash fund available for such situations - if they don’t, they would be well advised to look elsewhere to draw income until their investments recover. An equity release drawdown facility perhaps?

Even more pressing, is the person who was expecting to retire in the next year or so. Are they still going to retire but with reduced retirement income? Could you offer a better solution which may involve them avoiding using their pension pot before it recovers?

So, it’s clear that while later life advisers may be exercising social distancing there are many things they should also be doing to improve the situation of their clients. Now is definitely the time to make contact.

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