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    • Privilege435
    • By Privilege435 16th Apr 19, 8:46 AM
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    Privilege435
    Joint Life Annuities
    • #1
    • 16th Apr 19, 8:46 AM
    Joint Life Annuities 16th Apr 19 at 8:46 AM
    Hi all, first post, just found the forums.

    I'm retiring later this year and am fortunate in having a guaranteed annuity rate of over 11% for a single life annuity on a large part of my defined contribution pension pot. Just starting planning and before I get an IFA involved I want to understand a bit more about Joint Life Annuities as I have a wife I need to provide for.

    I understand that these usually provide 50% two-thirds or 75% as a spouses pension after the first death. I know what happens if I die first, what I don't know is what happens if my wife dies first. Do I still get the full 100% of the annuity or does it reduce to the 50% (or whatever the chosen percentage value is) the same as if I'd died first?

    Sorry if this has been asked before, I did try searching but didn't come up with the answer.
Page 1
    • Pension Geek
    • By Pension Geek 16th Apr 19, 8:49 AM
    • 176 Posts
    • 133 Thanks
    Pension Geek
    • #2
    • 16th Apr 19, 8:49 AM
    • #2
    • 16th Apr 19, 8:49 AM
    If your wife does first it’ll make no difference to the annuity, that will still be paid in full until you die.
    Not an expert, but like pensions, tax questions and giving guidance. There is no substitute for tailored financial advice.
    • Privilege435
    • By Privilege435 16th Apr 19, 9:08 AM
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    Privilege435
    • #3
    • 16th Apr 19, 9:08 AM
    • #3
    • 16th Apr 19, 9:08 AM
    Thanks.

    I thought (hoped) that was the case.
    • dunstonh
    • By dunstonh 16th Apr 19, 9:57 AM
    • 98,002 Posts
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    dunstonh
    • #4
    • 16th Apr 19, 9:57 AM
    • #4
    • 16th Apr 19, 9:57 AM
    I understand that these usually provide 50% two-thirds or 75% as a spouses pension after the first death.
    pretty much any combination to 100%.

    I know what happens if I die first, what I don't know is what happens if my wife dies first. Do I still get the full 100% of the annuity or does it reduce to the 50% (or whatever the chosen percentage value is) the same as if I'd died first?
    Technically, it's not a joint annuity. It is your annuity but with a spouse addon if you die before your spouse. it is 100% your income. If you die first, it becomes her income at the benefit rate. If she dies first then nothing changes as its still your income.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • sandsy
    • By sandsy 16th Apr 19, 10:56 AM
    • 1,456 Posts
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    sandsy
    • #5
    • 16th Apr 19, 10:56 AM
    • #5
    • 16th Apr 19, 10:56 AM
    Before you speak to an IFA, speak to the pension provider and see if they can change your single life guaranteed annuity rate into a joint life one, still using preferential terms. It would mean slightly less money for you but probably still better than what you might get on the open market.
    • bostonerimus
    • By bostonerimus 16th Apr 19, 2:25 PM
    • 2,825 Posts
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    bostonerimus
    • #6
    • 16th Apr 19, 2:25 PM
    • #6
    • 16th Apr 19, 2:25 PM
    How old are you. At usual retirement ages a single life annuity at 11% payout rate is very very generous...
    Misanthrope in search of similar for mutual loathing
    • fred246
    • By fred246 16th Apr 19, 7:30 PM
    • 1,479 Posts
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    fred246
    • #7
    • 16th Apr 19, 7:30 PM
    • #7
    • 16th Apr 19, 7:30 PM
    I knew an IFA who had made a lot of money asking a few questions and filling a few forms in. Her husband had done a series of manual jobs and had no pension provision. She retired and took out an annuity and promptly died. Good job she took out a joint annuity I said. Oh no apparently the plan was that he died first. She took out a single annuity and has left him in poverty.
    • Malthusian
    • By Malthusian 17th Apr 19, 9:45 AM
    • 5,641 Posts
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    Malthusian
    • #8
    • 17th Apr 19, 9:45 AM
    • #8
    • 17th Apr 19, 9:45 AM
    Before you speak to an IFA, speak to the pension provider and see if they can change your single life guaranteed annuity rate into a joint life one, still using preferential terms. It would mean slightly less money for you but probably still better than what you might get on the open market.
    Originally posted by sandsy
    It is very possible that the preferential terms will be single life only. They might offer a joint life annuity but the spouse's part will be on standard (i.e. poor) annuity rates.

    One thing to look at would be the difference between a single life annuity and joint life annuity, and how much you would get if you took the single life annuity and used the difference (the income you'd have to give up to have a joint life annuity) to fund a guaranteed premium whole of life insurance policy for your wife.
    • Privilege435
    • By Privilege435 19th Apr 19, 8:04 AM
    • 3 Posts
    • 0 Thanks
    Privilege435
    • #9
    • 19th Apr 19, 8:04 AM
    • #9
    • 19th Apr 19, 8:04 AM
    Technically, it's not a joint annuity. It is your annuity but with a spouse addon if you die before your spouse. it is 100% your income. If you die first, it becomes her income at the benefit rate. If she dies first then nothing changes as its still your income.
    That explains it. Thanks dunstonh. When it was called a Widow's Pension I understood what was going on. The change to being called a Joint Life annuity made me think it was something different.

    How old are you. At usual retirement ages a single life annuity at 11% payout rate is very very generous...
    I'm 64. Pension was taken out in 1985. At the time 11% didn't seem anything special as I think I was paying around 13% for my mortgage around then, perhaps a bit earlier. I did spot quite a while back that 11% might be rather good and pretty much doubled my contributions.

    It is very possible that the preferential terms will be single life only. They might offer a joint life annuity but the spouse's part will be on standard (i.e. poor) annuity rates.
    It is single life but I'm told by one of my previous business partner's who had the same policy that he was offered a joint life annuity at pretty good rates. I'll find out in the next few weeks if he was right!

    One thing to look at would be the difference between a single life annuity and joint life annuity, and how much you would get if you took the single life annuity and used the difference (the income you'd have to give up to have a joint life annuity) to fund a guaranteed premium whole of life insurance policy for your wife.
    That sounds a good option. Thanks Malthusian. Is there a specific name for a 'guaranteed premium whole of life insurance policy'
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