The Pension Wise advice website could be exacerbating unconscious bias and influencing financial decisions through the inclusion of a life expectancy calculator, according to research from the University of Stirling.

The research, which involved more than 2,000 participants, stipulated that the Office for National Statistics (ONS) life expectancy calculator linked on the site had inadvertently driven more people to take the cash lump sum, due to a recognised psychological approach called 'Terror Management Theory'.

The theory centres around people’s "desire to insulate themselves from a deep fear of having led an insignificant life and inevitable death".

The research explained that the calculator was "effectively asking people to face their own mortality", with users who used the calculator "far more likely" to choose the lump sum option.

The University of Stirling’s Dr David Comerford, who led on the research, commented: “While the government’s Pension Wise website seeks to provide information to assist people, the failure to adequately test the effects of the content and tools on the site, such as the life expectancy calculator, has created an unintended bias.

“Supported by our research findings, it is our recommendation that all such advisory sites and tools are adequately tested on an experimental basis before being fully launched to the public and, in the meantime, that the life expectancy calculator is removed from the Pension Wise website.”

Responding to the University of Stirling's research, Money and Pensions Service insight lead, Midge Clayton, said: "People reaching retirement face a wide range of choices which Pension Wise is there to help them negotiate. By contrast, this research gave people a stark choice between just two options - buying an annuity and taking cash. This is a poor simulation of real life, as it ignores the popular option of arranging a drawdown facility.

"Guidance involves discussing a range of choices, and people are highly unlikely to visit the single page on the Pension Wise site that deals with the specific issue of life expectancy in isolation, before choosing their pension access option."

He added that all aspects of the Pension Wise service are "carefully evaluated on a regular basis and our customers emerge both very satisfied with it and more knowledgeable and confident regarding their access options".

Clayton also stated that recent FCA data runs counter to the university's research, "in that people using Pension Wise guidance were actually more likely to choose the annuity option and less likely to choose the cash options offered in the experiment, than those not using any guidance or advice”.

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