Fiona Morrison, President of the Institute and Faculty of Actuaries (IFoA), comments on the measures announced in today’s Autumn Statement by the Chancellor of the Exchequer.

Flood Defence

“The announcement on funding for flood defence schemes is a positive step toward improving flood resilience for householders who live in flood-prone areas.  Five of the UK’s top six wettest years have occurred since 2000, therefore improvements in flood defences, especially protecting against surface flooding, will be a major factor in maintaining an affordable insurance market for householders who live in such areas. 

“With climate change likely to increase the number of extreme weather events, the IFoA views investment in flood defences in coming years as increasingly important in protecting homes and other property from flood.

“Affordable insurance remains an issue.  Our research shows there is a low take up of flood insurance by low income groups, with 24% of these households uninsured against flood.  Flood defences will go some way to helping protect this group of households from costly damage.”

Social Care

“The announcement to give Local Authorities the power to raise council tax an extra 2% to fund social care provision will help them meet some of the funding shortfall many Councils have been facing as a result of previous budget cuts.  However, research conducted by the Institute and Faculty of Actuaries found vast regional differences in the cost of social care and this change does not address that.

“As life expectancy has been steadily increasing over the last decade and healthy life expectancy is not keeping pace, how long a person can expect to live with health or social care needs is continuing to rise and this needs to be addressed.  A male in the UK, aged 65, can expect to live a further 17.8 years, and would likely have care needs for 7.4 years. The life expectancy for females aged 65 is a further 20.4 years and they would likely have care needs for 9.2 years. 

“Therefore, we recommend a Government-led awareness raising campaign to help people understand the potential care costs they might face so they can begin to take on the responsibility of saving towards these costs.”

~ENDS~

Editorial notes:

About the Institute and Faculty of Actuaries

The Institute and Faculty of Actuaries (IFoA) is a royal chartered, not-for-profit, professional body.

Research undertaken by the IFoA is not commercial.  As a learned society, research helps us to fulfil our royal charter requirements to further actuarial science and serve the public interest. 

Actuaries provide commercial, financial and prudential advice on the management of a business’s assets and liabilities, especially where long term management and planning are critical to the success of any business venture. They also advise individuals, and advise on social and public interest issues.

Members of the IFoA have a statutory role in the supervision of pension funds and life insurance companies. They also have a statutory role to provide actuarial opinions for managing agents at Lloyd’s.

Members are governed by the Institute and Faculty of Actuaries. A rigorous examination system is supported by a programme of continuing professional development and a professional code of conduct supports high standards reflecting the significant role of actuaries in society.

The IFoA is available to provide independent expert comment to the media on a range of actuarial- related issues, including enterprise risk management, finance and investment, general insurance, health and care, life assurance, mortality, and pensions.

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