The Longevity Dividend – The Business Case for Linking Health and Wealth

I have just returned from a couple of days’ walking a part of the Ribble Way in North Yorkshire with some old friends. Another milestone for me on the final day of our walk was the launch of the latest report produced by the World Economic Forum in collaboration with Marsh: The Longevity Dividend: The Business Case for Linking Health and Wealth

The two main focus areas of this report are:

1) highlighting and quantifying three areas key to the longevity economy that we feel have not received the attention they deserve: the cost of caregiving, and in particular the gender pensions gap; housing and the impact of ageism

2) illustrating how breaking down the silos between health and wealth can create a holistic and compelling business case for three example interventions to improve our health and financial resilience from the perspective of individuals, companies and policymakers.

Our lifespans have increased over recent decades much more quickly than our healthspans or workspans. Given that most state healthcare and care systems rely on taxes and social security contributions for their financing, we need to take action now to make the systems more sustainable, especially as the peak of the baby boomer generation now moves from what has been a traditionally working age into retirement. A big part of this is to promote healthier living in order to reduce avoidable acute and chronic diseases that impact productivity and shorten working lives.

We need to understand and promote the virtuous circle: better health means more energy, less time and money lost on medical appointments, more productivity, greater financial resilience, more retirement savings, less stress, more physical exercise, better health and so on.

There is an opposite vicious circle that is all too easy to slip into – a chronic disease can lead to physical and mental health issues that make it harder to stay active, leading to absences from work, more stress, reduced income and medical costs.

Employers enjoy a position of trust and have a big role to play in promoting healthy lifestyle, providing education on relevant heath topics and facilitating age-appropriate screenings. A big challenge in practice is building robust business cases to justify investment in interventions to improve health. We hope that the examples in our report, which illustrate how existing scientific research can be used to build a model to quantify the positive impact across health, wealth and productivity, can contribute to the construction of compelling business cases that lead to actions that will improve people’s lives.

The gender pensions gap is already significant (17% on average across the countries surveyed) and made worse by the fact that it is mainly women who time out of work for informal caregiving – not only does this disrupt career trajectories, missing out on pension savings especially early in a career can make a big difference to outcomes: the impact of one-year out of work coupled with the impact of the gender pay gap can reduce retirement savings by 24%. Again here, employers can play a key role by helping caregivers maintain career paths after their return, and providing the opportunity to make up for lost retirement savings.

It has been a real pleasure to work with the many experts on the Steering Group and Working Group, and the core team of Haleh Nazeri Isabela Bartczak John O’Brien Barry Clossick, CFA, CAIA, QFA and Eoghan Hughes preparing this report. We hope that you find it interesting and useful!