Take a step back from the COVID-19 pandemic, and compare one country against another. I wonder which will benefit and which will suffer from the consequences of COVID 19. I mean in the long run, measured over the next thirty years.
In the UK, the oldest in the population have died and will die. Their wealth will pass to the next generation. The age profile of the country will change. There will be more people of working age and more spending power for those who inherited unexpectedly early. The drain on the Health Service will be less because the vulnerable will have died. For non-COVID patients there will be an increased demand. That will come from those whose disease progressed more than it would with earlier treatment. But that will be offset in part or whole by those who died waiting for treatment.
Life expectancy will decrease because those who could have had treatment for non-COVID disease early did not. And pension funds will benefit, according to XPS actuaries:
Article In The Times November 30th 2020
Employers with large pension deficits are expected to seize on Covid-19 to justify making smaller payments in their negotiations with the funds they sponsor in the coming years.
An analysis from the actuaries XPS, formerly Punter Southall, suggests that deaths in Britain by the end of March will be around 100,000 higher than in a normal year. In its worst case scenario, which it says is unlikely, it sees 250,000 excess deaths in total.
These so-called “excess deaths”, along with a recession-induced reduction in life expectancy growth in the years ahead, will cut the liabilities of defined benefit schemes in the UK by between 1.5 and 3.5 per cent — or £25 billion to £60 billion, it estimates on its central case forecast.
COVID-19 Case Fatality Rates
Britain had a case fatality rate of 15.4% early on in the pandemic. That was in part caused by decisions made by the British Government to move elderly infected patients from hospital to nursing homes. Once in nursing homes filled with the elderly, the virus spread like wildfire.
The COVID-19 death rate when I first drafted this article at the end of 2020 was down to 3.6%. Now at the beginning of 2022, the death rate is down to a fraction of 1%.
The initial case fatality rate in Britain was much higher than almost anywhere in the world. Britain will benefit, therefore, from having a older generation die early. It’s positively Machiavellian.
The unknown is long-COVID, and how long it lasts. How long is the ‘long’ in long-COVID? And what proportion of the affected will find life less than optimal far into their lives?