Many projections for future improvements (i.e. reductions) in mortality rates (or increases in longevity) assume that these reductions will tend rather rapidly to zero. This incorporates the concept of there being a biological limit to life. Many actuaries, and the UK’s Pensions Regulator, are questioning whether we are as close to such a limit as previously assumed. Increases in life expectancy are, at the UK population level, showing few, if any, signs of slowing. As a result it is increasingly common for projections to make an allowance for some minimum level of continued year-on-year reductions in
mortality rates or ‘underpin’. Such a minimum can be considered as the level of reductions in mortality sustainable by ongoing medical and health care advances.

The simplest form of minimum improvements is when the same rate of reduction is applied at all ages, for example annual reductions in mortality rates of 1%. However, since mortality rates at the very oldest ages do not seem to be falling as rapidly as at younger ages some actuaries prefer to adopt a sliding scale with lower improvements at older ages.