Background - To plan for pensions and health and social services, future mortality and life expectancy need to be forecast. Consistent forecasts for all subnational units within a country are very rare. Our aim was to forecast mortality and life expectancy for England and Wales' districts. Methods - We developed Bayesian spatiotemporal models for forecasting of age-specific mortality and life expectancy at a local, small-area level. The models included components that accounted for mortality in relation to age, birth cohort, time, and space. We used geocoded mortality and population data between 1981 and 2012 from the Office for National Statistics together with the model with the smallest error to forecast age-specific death rates and life expectancy to 2030 for 375 of England and Wales' 376 districts. We measured model performance by withholding recent data and comparing forecasts with this withheld data. Findings - Life expectancy at birth in England and Wales was 79·5 years (95% credible interval 79·5–79·6) for men and 83·3 years (83·3–83·4) for women in 2012. District life expectancies ranged between 75·2 years (74·9–75·6) and 83·4 years (82·1–84·8) for men and between 80·2 years (79·8–80·5) and 87·3 years (86·0–88·8) for women. Between 1981 and 2012, life expectancy increased by 8·2 years for men and 6·0 years for women, closing the female–male gap from 6·0 to 3·8 years. National life expectancy in 2030 is expected to reach 85·7 (84·2–87·4) years for men and 87·6 (86·7–88·9) years for women, further reducing the female advantage to 1·9 years. Life expectancy will reach or surpass 81·4 years for men and reach or surpass 84·5 years for women in every district by 2030. Longevity inequality across districts, measured as the difference between the 1st and 99th percentiles of district life expectancies, has risen since 1981, and is forecast to rise steadily to 8·3 years (6·8–9·7) for men and 8·3 years (7·1–9·4) for women by 2030. Interpretation - Present forecasts underestimate the expected rise in life expectancy, especially for men, and hence the need to provide improved health and social services and pensions for elderly people in England and Wales. Health and social policies are needed to curb widening life expectancy inequalities, help deprived districts catch up in longevity gains, and avoid a so-called grand divergence in health and longevity.