Joint Life vs Single Life Annuities: How to Protect Your Spouse's Retirement Income

If you're planning to buy an annuity at retirement, one of the first questions your provider will ask is whether you want a single life or joint life policy. It sounds like a tick-box question. It isn't. The choice you make is permanent, can't be reversed once payments start, and could leave your spouse or civil partner with nothing if you get it wrong.

It's a decision that catches people out. With single life annuities offering noticeably higher income, the temptation to maximise your own retirement pay packet is real — but for couples, doing so without thinking through what happens after the first death can be a costly mistake. This guide walks you through how joint life annuities work, what they cost, and how to decide which option fits your situation.

What is a joint life annuity?

A joint life annuity pays you an income for the rest of your life, then continues paying a portion of that income to your spouse, civil partner or other named dependant after you die. The continuing payment can be set at any percentage of your original income — most commonly 50%, 66.7% (two-thirds), or 100%.

A single life annuity, by contrast, pays only for your own lifetime. When you die, the income stops — even if your spouse outlives you by 20 years.

Joint life annuities used to be the default option for married couples, but since pension freedoms in 2015 the take-up has fallen sharply. According to the Financial Conduct Authority's retirement income data, single life annuities now make up the majority of annuity sales, partly because annuitants want maximum income and partly because many believe drawdown will provide for their partner instead. Both reasons can be sound — but neither replaces the income certainty that joint life gives a surviving spouse.

How much income do you give up for joint life cover?

The trade-off is straightforward: more protection means less income upfront. Joint life annuities cost more to underwrite because the insurer expects to be paying out for longer — across two lives instead of one — so the headline rate is lower.

As a rough guide, in current market conditions a 65-year-old buying with £200,000 might see something like the following (figures are illustrative and depend on rates at the time of purchase):

• Single life, level income: around £13,000 per year
• Joint life with 50% spouse's pension: around £12,000 per year (roughly 8% less)
• Joint life with 66.7% spouse's pension: around £11,600 per year (roughly 11% less)
• Joint life with 100% spouse's pension: around £10,800 per year (roughly 17% less)

The gap widens if there's a significant age difference between you and your partner. Insuring a much younger spouse means a longer expected payout period, which pulls the headline rate down further.

It's worth getting quotes for all variations at once — most annuity brokers will run them side by side so you can see the actual numbers for your pot, age, postcode and health.

Choosing the spouse's percentage: 50%, 66% or 100%?

If you opt for joint life, the next decision is how much income continues after the first death. There's no universally right answer — it depends on your partner's other resources and the household's essential costs.

50% spouse's pension

The cheapest joint life option and historically the most common. It reflects the idea that a single survivor needs less than a couple — one car, one council tax bill, lower food costs. The PLSA's Retirement Living Standards back this up: a "comfortable" retirement for a couple is £59,000, but for a single person it's £43,100, around 73% of the couple's figure.

66.7% (two-thirds) spouse's pension

A middle ground. This level is often used by occupational pension schemes and broadly matches the PLSA single-vs-couple ratio. It gives meaningful continuing income without sacrificing as much upfront as a 100% option.

100% spouse's pension

The most generous, and the most expensive. Worth considering if your spouse has very little pension of their own, if your annuity is the household's main income, or if you're significantly older than your partner and want to ensure they don't face a sharp drop in living standards.

When joint life makes sense — and when single life might be better

Joint life cover isn't automatically the right answer for every couple. A few situations where it usually does make sense:

• Your spouse has little or no pension provision of their own
• Your annuity is the bulk of the household's guaranteed income
• There's a significant age gap, especially if you're the older partner
• Your spouse is in better health than you are and likely to outlive you by many years
• You want absolute certainty that your partner won't face hardship after you die

And situations where single life can be the better call:

• Both partners have substantial pensions of their own
• You have other assets — ISAs, property, drawdown pots — that can support a survivor
• You hold separate life insurance that covers the loss of your income
• You're unmarried with no qualifying dependant (a joint life annuity normally requires a spouse, civil partner or financial dependant)
• You're much younger than your partner and your annuity is just one part of a broader income plan

You may also want to consider a guarantee period alongside a single life annuity — typically 5 or 10 years — which ensures payments continue to your estate for that fixed period even if you die early. It's not the same as ongoing spouse cover, but it adds a degree of protection at modest cost.

A practical example: the Roberts

Imagine Susan, 65, and David, 67. David has a £250,000 SIPP and wants to annuitise £180,000 of it after taking his 25% tax-free cash. Susan has a small workplace pension of around £4,000 a year and the State Pension. The household's essential bills run to around £22,000 a year.

If David buys a single life annuity, he might get around £11,700 a year — but if he dies first, Susan is left with just her £4,000 workplace pension plus the State Pension (around £15,500 combined). The household's essential bills suddenly outstrip her income.

If David chooses a joint life annuity at 66.7%, his income might fall to around £10,400 a year. But if he dies first, Susan continues to receive around £6,900 a year from his annuity on top of her own pensions — closing the gap to her essential costs almost completely.

For the Roberts, the £1,300 a year David gives up is effectively buying Susan the equivalent of a £140,000+ annuity she could never afford to buy herself in her late 70s. Looked at that way, the price of joint life cover is often a bargain.

Don't forget enhanced rates and shopping around

Whichever option you choose, do not accept the rate your existing pension provider offers without shopping around using the open market option. The difference between the best and worst annuity rates can easily exceed 15%, and an enhanced annuity — if either partner qualifies on health or lifestyle grounds — can boost income further. For more on this, see our guide to enhanced annuities.

Joint life annuities are also taxed exactly like any other pension income — your spouse's continuing payments are subject to income tax under PAYE in the normal way, against their own personal allowance and tax bands.

How this decision fits with drawdown

Many couples now use a hybrid approach: a joint life annuity covering essential bills, with the rest of the pension pot in flexi-access drawdown for flexibility and inheritance planning. Drawdown can be passed to any beneficiary tax-efficiently — annuities generally cannot, beyond the spouse's pension you've already specified. Pairing the two can give you the income certainty of an annuity with the flexibility and legacy potential of drawdown. We explore the mechanics in our guide to combining annuity and drawdown.

Key takeaways

• A joint life annuity continues paying a chosen percentage of your income to your spouse for the rest of their life — a single life annuity stops when you die
• The income trade-off is typically 8% to 17% less upfront, depending on the spouse's percentage chosen
• Common spouse's pension levels are 50%, 66.7% and 100%; the right level depends on your partner's other income and the household's essential costs
• Single life can be sensible if both partners have their own pensions and other resources; joint life is usually wise if your annuity is the household's main guaranteed income
• The decision is permanent once payments begin — it cannot be unwound
• Always shop around using the open market option and check whether either partner qualifies for an enhanced rate

Choosing how to take a guaranteed retirement income is one of the most important financial decisions a couple will make. The information in this article is general guidance only and not personal financial advice — your own circumstances, health and tax position may change the right answer significantly. Speaking to a qualified financial adviser before annuitising a large pension pot is almost always money well spent.

To explore how an annuity could fit alongside flexible drawdown, try our retirement planner, or use our drawdown calculator to see what your pot could deliver in flexible income. You can also compare drawdown providers if you'd like to keep some of your pension invested while annuitising the rest.