Glossary · UK
What is Joint Life Annuity?
A pension annuity that keeps paying an income to a surviving spouse or partner after the main holder dies, rather than ending on the first death.
Full Definition
A joint life annuity is a guaranteed income bought with your pension pot that continues to pay a named partner after you die, instead of stopping on your death like a single life annuity. You choose what proportion the survivor receives, commonly 50%, two-thirds or 100% of the original income. Because the insurer expects to pay out over two lives, the starting income is lower than a single life annuity bought with the same pot. In the UK the income is taxable as earnings through PAYE for whoever receives it. This matters for couples who rely on the pension to support both partners, as it protects the survivor from a sudden drop in income. You can usually combine it with escalation to guard against inflation, or with a guarantee period. As with all annuities, compare rates on the open market and weigh the lower starting income against the security a surviving partner gains, since the decision is generally permanent.