Joint and Single Life Annuities

You may choose to include a spouse or civil partner in your annuity. On your death an annuity will be paid to your spouse\partner. The amount paid is determined from the outset and could be 100%, 50% or 25% of your annuity.

For example, an annuity that reduces by 50% will pay half of your annuity to your spouse\partner after your death.

The cost of providing a spouses annuity largely depends on the age of your spouse and whether or not they are expected to outlive you. If they are expected to outlive you then the annuity is will be paid longer and must therefore start at a lower rate. If your spouse is not expected to outlive you then the cost of a joint life annuity will not be much more than a single life annuity.

You can calculate annuity rates to see how much income you may have to give up to provide a spouses annuity.

Why choose a joint life annuity?

If your spouse\partner has little or no income of their own then you should consider how they will afford to live after your death, in which case it make sense to give up some of your income to provide an income for your spouse. If your spouse has their own income in retirement then this may not be so important.

A guarantee period of 5 or 10 years may be a cheaper alternative of providing an income for a specific period rather than taking out a joint annuity. Remember, the guarantee ends 5 or 10 years after the annuity starts and NOT after you die.

You should also consider whether or not to include proportion or overlap.