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Aviva: Advisers underestimating clients’ life expectancy

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.


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There are 3 comments at the moment, we would love to hear your opinion too.

  1. “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.”

    Really? Perhaps we can also fill the gap left by the lack of GP’s too? What utter tosh.

  2. For those without FS benefits, Retirement has always been a journey rather than a destination. But how many clients understand this?

    Modelling long term income extraction utilising planning tools that explain J curve and U curve income needs will / should be the norm.

    We know the biggest threat is of course running out of funds, client expectation of income and lifestyle from their accrued fund needs to be managed. Sadly, there is little or no debate of the benefits of utilising unit linked guarantees, other than to denounce them as expensive why?

    Who in their right mind; if they have objectively funded pension would not insure their retirement funds? My experience is that; it is not the cost of the guarantee that is the hurdle, its the mindset of the client and their soon to be replaced adviser!

  3. For the last 23 years e have been advising client to look at minium age of 100 in cash flow .Maybe I should increase it to age 110!

    As for predicting clients’ life spans that should can use DNA testing or just leave it to St Peter !

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