LONDON, 17 July 2012 – With the London 2012 Olympics fast approaching, Aon Hewitt, the global human resource solutions business of Aon plc (NYSE:AON), has looked at the similarities and differences between the economic situation in 1948 - the last time the Games were in London - and 2012.

Moving faster – living longer
One of the most profound changes in the UK over the past 64 years has been the change in life expectancy. But has the change kept pace with improvements in the 100m world records?

Longevity                               1948                                    2012
Life Expectancy                     Men – 66                            Men - 78
                                                   Women - 71                     Women – 82
100m record                           Men 10.2 secs                  9.58 secs
                                                  Women 11.5 secs            10.49 secs

Martin Bird, managing principal at Aon Hewitt, said:

“Usain Bolt has ambitions to take his world record even lower and he should have longer to achieve it, as his life is likely to last longer than most of his record-holding predecessors.  In the UK, for example, standards of living and medical advances over the past 64 years mean that over 11 million people alive today can expect to live to over 100 years old - a number that is growing constantly.  By 2076 – another 64 years’ time – men are predicted to live to an average age of 89 and women to 92. However, calculations show that the change in life expectancy over the past 15 years has added around 30% to UK defined benefit (DB) pension scheme liabilities.

“While many schemes have already taken steps to reduce their longevity risk, life expectancy can only become an increasing concern for them, as it continues to rise. In the first instance, trustees and sponsors must ensure that projections for their scheme members' life expectancy are as up to date as possible and that they explore the range of risk settlement options available to them. This market has grown significantly in the past decade and pension schemes now have genuine choices. It is essential that trustees and sponsors act to ascertain the most appropriate strategy for their scheme.”

"The Austerity Games" – again?

Colin Robertson, global head of asset allocation at Aon Hewitt said:

"The 1948 Olympics were referred to as the ‘Austerity Games’, due to the post-Second World War economic climate, a title that might appear equally apt now. Some of the trends we saw in 1948 are evident today, but with a twist. With the 1947 Marshall Pan, the US assisted Europe and notably Germany from its state of post-war ruin. Now Germany is bailing out the struggling countries of Europe. Another example is government debt, which is currently considered to be very high at around 85% of UK GDP, but in 1948 it was around 250% of GDP (although private sector debt is now much higher).

“In terms of markets, equities yielded more than gilts in 1948, just as at present. However, this resulted in a strategic move by pension funds into equities whereas today de-risking out of equities is in vogue."

Running, jumping…retiring

The Olympic Games call on the youth of the world to gather but 1948 was also a key time of change in the way the more mature people of the UK could be supported through their retirements.  Changes in longevity and company pensions have brought near unprecedented change to retirement provision in recent years and with the introduction of auto-enrolment and NEST it looks like there is no let up in 2012:

Paul McGlone, principal and actuary at Aon Hewitt, said:

“While 1948 marked a fairly bleak period of post-war reconstruction, it was also the year that the basic state pension was first introduced - a provision that has become challenging to live on now, despite it being far greater in real terms than when it was introduced. It is also interesting to note that the state pension age was reduced from 70 for both males and females in 1948.  We find ourselves edging back closer to that State Pension Age again today and it is a point which we will almost certainly reach in another 64 years.

“As individuals are increasingly likely to reach the age of retirement, the issue of pension provision has become more important than ever. In light of this, another key event for 2012 – the launch of auto-enrolment - is an important step in reminding individuals that they are ultimately responsible for preparing for their own retirement - particularly given projected increases in life expectancy.”

Notes to editors

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About Aon Hewitt
Aon Hewitt is the global leader in human resource solutions.  The company partners with organisations to solve their most complex benefits, talent and related financial challenges, and improve business performance.  Aon Hewitt designs, implements, communicates and administers a wide range of human capital, retirement, investment management, health care, compensation and talent management strategies.  With more than 29,000 professionals in 90 countries, Aon Hewitt makes the world a better place to work for clients and their employees.  For more information on Aon Hewitt, please visit www.aonhewitt.com.

About Aon
Aon plc (NYSE: AON) is the leading global provider of risk management, insurance and reinsurance brokerage, and human resources solutions and outsourcing services. Through its more than 61,000 colleagues worldwide, Aon unites to empower results for clients in over 120 countries via innovative and effective risk and people solutions and through industry-leading global resources and technical expertise. Aon has been named repeatedly as the world's best broker, best insurance intermediary, reinsurance intermediary, captives manager and best employee benefits consulting firm by multiple industry sources. Visit www.aon.com for more information on Aon and www.aon.com/manchesterunited to learn about Aon's global partnership and shirt sponsorship with Manchester United.