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Single or joint-life lifetime annuities?

Before you buy a lifetime annuity you will have to decide if you want an annuity that will pay an income for you only, or one that can continue to pay an income for your spouse, partner or financial dependant after your death.

  • Single life – a single-life annuity may be suitable if you don’t have a spouse, partner or any other dependant relying on you for financial support (for example, they have their own pension arrangement). A single life annuity will not pay out to your spouse, partner or dependant after your death (unless there is a guarantee period – but this will only pay for a fixed number of years).
  • Joint life – a joint-life annuity will continue to pay an income to your spouse, partner or financial dependant after you die for the rest of their life. If your financial dependants are children, the annuity will usually pay until they reach a certain age, which may vary.

After you die, the income paid to your spouse, partner or financial dependants will be a proportion of the income you were getting just before your death. You have to choose that proportion at the time when you take out the annuity, and it can be for example, 100%, two thirds or 50% of your annuity at the time of your death. A higher proportion will have a higher cost, and so your annuity income will be lower.

Be aware that:

  • Joint-life annuities are more expensive than single life, because the insurer will expect to pay the income for longer.
  • Some annuity providers may not set up a spouse or partner's annuity if they are more than ten years younger than you, so check with the provider.
  • Some occupational money purchase schemes insist that the income level is half of what you were receiving, so check with your provider.
  • You should check with your provider whether your partner will be eligible to receive the income if you are not married or in a civil partnership.
  • If you have a protected rights pension fund, you have to buy a joint life annuity paying a 50% spouse's pension if you are married or have a civil partner.

You can compare annuity rates for single or joint-life, level or escalating annuities at Compare annuities. Enter the type of annuity you’re interested in and the size of your pension fund and see what you could get.

Top tips

  1. Start thinking about your annuity choices at least four months before you retire.
  2. Don't forget to plan for your spouse, partner or other dependants if they rely on you for income.