Joint Life pension

beebee

What happens if I take a joint life pension to provide for my wife when I die, but she dies before me? Can my pension be reverted back to single life. Advice appreciated

jem16

beebee wrote: »

What happens if I take a joint life pension to provide for my wife when I die, but she dies before me? Can my pension be reverted back to single life. Advice appreciated

Once it's arranged - that's it. It cannot be changed.

dunstonh

It wouldnt need to revert back as its joint life, second death. Ask you IFA these questions. That is what they are there for. If you are not using an IFA then why? IFAs get the best annuity rates.

kidmugsy

dunstonh wrote: »

It wouldnt need to revert back as its joint life, second death. Ask you IFA these questions. That is what they are there for. If you are not using an IFA then why? IFAs get the best annuity rates.

Is there a rough rule of thumb, dunstonh, for the minimum size of pension fund that an IFA might choose to search for an annuity for?

dunstonh

kidmugsy wrote: »

Is there a rough rule of thumb, dunstonh, for the minimum size of pension fund that an IFA might choose to search for an annuity for?

I wouldnt want to put a figure on different IFA business models. Some may have lower limits, others may not. I think if it was £20k plus then its a good idea. Although I did one the last few weeks that £9500 and that was better. Although that was for an existing client. Had it been a phone call from someone knew asking if I would look at it, I would probably have said no with the reason that the fund is not big enough.

mania112

Agree with £20k as a benchmark, although could be flexible as Dunstonh says, depending on who's asking.

Then again, although probably unlikely, if Mr. Client wants to pay a fee for it the purchase price doesn't matter.

jem16

beebee wrote: »

Can my pension be reverted back to single life. Advice appreciated

Out of interest what would be your reason for wanting it to refer back to single life?

Is it because you feel you would get a higher pension?

mania112

jem16 wrote: »

Is it because you feel you would get a higher pension?

That's what I assumed.

If the OP thinks his wife may die first (if she is in ill-health or considerably older) he would have to decide on Single Life from day one.

Getting quotes for both SL and JL will help shed some light.

He could also consider Drawdown.

kidmugsy

Another possibility, jem, would be to split the pot in two, leaving one bit (say, 30% of the pot) to grow uncrystallised so that his wife could receive it all untaxed if he died first, but it would still be available to him if she died first. The other 70% could be used to buy a single life annuity.

Have you ever heard of anyone doing that?

Or, a more elaborate version might be to split the pot more lopsidedly - say 80:20 - but for the husband to take out a term life insurance policy to pay some capital to his wife if he dies too soon for the 20% fund to have grown much. I'm so smitten by this idea I wonder I've never heard of it before. Does it mean I'm missing some drawback?

jem16

kidmugsy wrote: »

Another possibility, jem, would be to split the pot in two, leaving one bit (say, 30% of the pot) to grow uncrystallised so that his wife could receive it all untaxed if he died first, but it would still be available to him if she died first. The other 70% could be used to buy a single life annuity.

Have you ever heard of anyone doing that?

Only for Phased Drawdown. Haven't heard of it when using an annuity.

kidmugsy

jem16 wrote: »

Only for Phased Drawdown. Haven't heard of it when using an annuity.

That's the point I missed: it may well be wiser to do a drawdown than to buy an annuity. Though some people will prefer the certainty of an annuity.