You’ll need to decide whether you want the annuity to pay out to someone after you die.
A single life pension is only paid for your lifetime and will stop when you die.
It pays a higher level of income than a joint life annuity. It might suit you if you don’t have any financial dependants.
A joint life annuity also provides an income for your spouse, civil partner or other dependant after you die.
This provides a continuing income – which is usually expressed as a percentage from 1-100% of the income that you were receiving immediately before your death.
For example, 50% or 25% of the income you were receiving will be payable after your death.
A joint life annuity will often pay out a lower regular income than a single life annuity, as it’s assumed that the pension would need to pay out over a longer period. However, this isn’t always the case.
Some providers might not agree to set up a retirement income for a spouse or partner if they’re more than ten years younger than you.
It might suit you if your partner, or someone who’s financially dependent on you, won’t have much income of their own after you die.
If you are in a long-term relationship, the financial decisions you make now could affect both of you for the rest of your lives.
So it's worth discussing these questions with your spouse, partner or dependant:
- Does my spouse/partner/dependant have a pension?
- Will they have guaranteed income of their own?
- Will their income be enough for them to manage financially after I die?
- If my spouse’s/partner’s/dependant’s health is poor, does it make more sense to have higher income assured now?
- What happens if they die before I do?