Advisers using Office for National Statistics data to determine clients’ life expectancy risk underestimating the true figure by 10 years, Aviva warns.
A report on longevity produced by the provider shows how rapid improvements in life expectancy mean one in three 65-year-old men will live beyond 89.
Aviva head of pensions policy John Lawson says advisers’ clients are more likely to be part of this group due to the correlation between wealth and life expectancy.
He says: “Many adviser firms use ONS data, but that could leave them 10 years out. 95 is probably a better target age for their clients, rather than 85.”
Lawson says the UK is likely to follow Australia’s lead where advisers have a greater focus on accurately predicting clients’ life spans than the intricacies of investment.
He says: “The conversation around where you invest your money is less important in Australia. They tend to focus on your life span and what your lifestyle will be like.
“I think we’ll evolve like that.”
The report also calls for the inclusion of nationally-agreed life expectancy figures in the Government-backed guidance service, Pension Wise.