Beneficiaries of guaranteed period for annuity

Brie

Hey - just doing a sense check here....

I'm currently going over my DC pensions to see what I want to do with the funds.  I've been thinking of self administrating a SIPP for the next few years before passing it to a pro to handle when I can't be asked.  But today received all the bumpf in the post about the larger of the 2 funds and am wondering if I should just go for an annuity.

Specifically I'm looking at a single life annuity but with a guaranteed period of 10 years with the money to be paid to a beneficiary (aka the OH).  To be very blunt my OH is not very good with finances plus is not in the best of health.  So a 10 years guarantee would be (hoping to be wrong) more than sufficient should I pop off first and relatively soon. 

But I can't see anything in the inch thick stack of paper that says what happens with the guarantee if OH also pops before the 10 years is up (either before or after me).  Is this the sort of thing that one might put in a will?  Or does the scheme expect one to update the bene as things change?    

Obviously if I go first and then the OH I'm not in a position to be contacting anyone hence wondering if it's a will thing or if the scheme accepts a "to OH but after that to nieces/best mate/etc".

dunstonh

Specifically I'm looking at a single life annuity but with a guaranteed period of 10 years with the money to be paid to a beneficiary (aka the OH). 

Have you priced against value protect and a joint annuity?

 To be very blunt my OH is not very good with finances plus is not in the best of health.  So a 10 years guarantee would be (hoping to be wrong) more than sufficient should I pop off first and relatively soon. 

With joint annuities, the health of the spouse can uplift the annuity rate.

But I can't see anything in the inch thick stack of paper that says what happens with the guarantee if OH also pops before the 10 years is up (either before or after me).

the guarantee goes to any beneficiary. its not linked to spouse.  You can nominate one but the final decision is with the pension provider.
spouse matters if you select joint.  With that, you can pick any spouse or current spouse.

 Is this the sort of thing that one might put in a will? 

No.  Pensions are not subject to your Will.

Brie

dunstonh said:

Specifically I'm looking at a single life annuity but with a guaranteed period of 10 years with the money to be paid to a beneficiary (aka the OH). 

Have you priced against value protect and a joint annuity?  No.  Value protect? Not seen that anywhere.

 To be very blunt my OH is not very good with finances plus is not in the best of health.  So a 10 years guarantee would be (hoping to be wrong) more than sufficient should I pop off first and relatively soon. 

With joint annuities, the health of the spouse can uplift the annuity rate. Will look at that again.

But I can't see anything in the inch thick stack of paper that says what happens with the guarantee if OH also pops before the 10 years is up (either before or after me).

the guarantee goes to any beneficiary. its not linked to spouse.  You can nominate one but the final decision is with the pension provider.
spouse matters if you select joint.  With that, you can pick any spouse or current spouse.

 Is this the sort of thing that one might put in a will? 

No.  Pensions are not subject to your Will.

some answers above....

but still confused....is a 10 year guarantee actually a 10 year guarantee or is it a 10 year guarantee except when the beneficiary has died in which case the payments stop immediately?

dunstonh

Have you priced against value protect and a joint annuity?  No.  Value protect? Not seen that anywhere.

Most annuity providers offer it.     However, many DIY quote sites for annuities do not offer all the options.

but still confused....is a 10 year guarantee actually a 10 year guarantee or is it a 10 year guarantee except when the beneficiary has died in which case the payments stop immediately?

Its a 10 year guarantee.   Its not a 10 year guarantee if your spouse is still alive.
if your preferred nomination dies then you either nominate another or the administrators will look at the situation on death and decide who gets it (technically, they still do that even if your nominated beneficiary is still alive)

Have you quoted 20 or 30 years on the annuity too?     On occasion, a certain provider has offered better terms on longer guarantee periods as part of a marketing campaign.  I don't know if they are at the moment but its worth looking as sometimes the cost differences are not as great as you would think.    However, often at that point, value protect becomes better.

Brie

brilliant!  thanks @dunstonh

Qyburn

Why not go for 100% spouse benefit, and forget the guarantee?

Malthusian

People in poor health do sometimes defy the odds. If your spouse is in worse health than you, then joint life protection for their lifetime on an enhanced annuity could be a trivial cost, as the insurer would be basing the rate mainly on your own life expectancy.
And I don't understand how "not very good with finances" translates into "would be able to cope with a sudden drop in guaranteed income after the partner who ran the household finances predeceased them".

Brie

Malthusian said:

People in poor health do sometimes defy the odds. If your spouse is in worse health than you, then joint life protection for their lifetime on an enhanced annuity could be a trivial cost, as the insurer would be basing the rate mainly on your own life expectancy.
And I don't understand how "not very good with finances" translates into "would be able to cope with a sudden drop in guaranteed income after the partner who ran the household finances predeceased them".

Well let's hope you are right about the health and I am wrong.  Despite being older my health is (currently) better but yes I should have a look at all the options.

As for the rest - I'm just looking for ways that would maximise the income while we're together and make it simple so that it requires not thought really.  I'm still in early planning stages so it may all change quite radically.