Should I Choose a Single or Joint Life Annuity?

If you’re approaching retirement and thinking about buying an annuity, one of the biggest decisions you’ll face is whether to go for a single life or joint life option.

Put simply, a single life annuity pays you a regular income for life—but it ends when you do. A joint life annuity, on the other hand, continues to pay an income to someone else—usually a spouse, partner or dependent—after you’ve passed away.

This decision doesn’t just affect your future—it could also shape your partner’s financial security after you’re gone. It’s also one of the main factors that will affect how much income you’re offered when you buy your annuity.

Let’s walk through the options so you can decide what’s right for you.

What Is a Single Life Annuity?

A single life annuity pays you a guaranteed income for the rest of your life. It’s a straightforward option and usually gives you a higher income than a joint life annuity, because the payments stop when you die.

If you’re single, have no dependents, or have made other plans to support loved ones, this option might suit you well. Some people in couples also choose a single life annuity if their partner has other sources of income or if they want to maximise what they get during their own lifetime.

But the main drawback is clear: once you die, the payments stop. That means your partner—or anyone else you might have supported—won’t receive any income from the annuity after you’re gone.

That said, you don’t have to leave them with nothing. There are ways to add death benefits to a single life annuity, which we’ll cover a bit later.

How Does a Joint Life Annuity Work?

A joint life annuity is designed to continue paying an income after your death. This can provide real peace of mind if you’re in a relationship or have someone who depends on you financially.

When setting it up, you can choose how much income your partner or beneficiary will receive once you’re gone. Some people choose for the full income to continue, while others opt for a reduced amount—say, 50%—to help cover basic living costs.

It really depends on your situation. For example, if your partner has their own pension, savings, or life insurance, they might not need the full amount. But if your income would be their main source of support, a 100% continuation might make sense.

Because the provider expects to pay income for a longer period of time, joint life annuities usually pay less while you’re alive than single life annuities do. Still, for many people, the trade-off is worth it to help protect a partner’s financial future.

Also keep in mind that if you choose a fixed term joint annuity, the payments will only continue until the end of that term, not necessarily for the rest of your partner’s life.

Does Health Affect Joint Life Annuities?

Yes, health can play a significant role in how much income you’re offered. If you—or your partner—have certain medical conditions or lifestyle factors (like smoking), you might qualify for an enhanced annuity, which pays out more.

If only one of you qualifies for an enhanced rate, the provider may look at both your health profiles and adjust the offer. For example, if you’re in poor health but your partner is expected to live much longer, the overall income you’re offered might be lower than if you were buying an annuity just for yourself.

Can I Name My Child Instead of a Partner?

Yes, in many cases you can name a child or other loved one as your joint annuity beneficiary—though not all providers allow it.

Since pension reforms in 2015, you’re no longer restricted to naming a spouse or civil partner. However, if your chosen beneficiary is significantly younger than you—such as an adult child or grandchild—your annuity income will usually be much lower. This is because the provider expects to pay out for longer.

If this is something you’re considering, it’s worth speaking to a financial adviser and checking with annuity providers to see what your options are.

Which Is Better: Single or Joint Life?

There’s no one-size-fits-all answer. It really comes down to your personal circumstances, your goals for retirement, and the needs of any loved ones who depend on you.

Here are a few key things to think about:

• Do you have a partner or dependent? If so, a joint life annuity can offer them financial protection if you pass away first.
• Are you trying to maximise your own retirement income? A single life annuity usually pays more while you’re alive.
• Will your beneficiary have other sources of income? If they’ll be financially secure without your annuity, you might prefer the higher income from a single annuity.
• How old and healthy are you both? Providers take both your ages and health into account when calculating joint annuity income. If your beneficiary is younger or in good health, you may be offered less.

Since every provider uses slightly different methods to calculate quotes, it’s always a good idea to shop around and compare options before committing.

Are There Other Ways to Protect My Loved Ones?

Yes—if you’re leaning toward a single life annuity but still want to leave something behind, you might want to consider adding annuity death benefits.

Here are the two main types:

Value protection

This allows a lump sum to be paid to your beneficiaries if you die before you’ve received the full value of your annuity. For example, if you bought a single life annuity with £100,000 and only received £14,000 in income before passing away, your estate could receive the remaining £86,000.

Guarantee periods

You can set up your annuity so that it continues to pay out for a guaranteed number of years—even if you die during that time. For instance, if you choose a five-year guarantee and pass away after two years, payments will continue to your estate or nominated person for another three years.

If you die before the age of 75, payments from both of these options are normally tax-free for your beneficiaries. If you’re 75 or older, payments will be taxed at their income rate.

Getting Advice Can Make a Real Difference

Choosing between a single life and joint life annuity is a personal decision—one that depends on your health, your family situation, and what kind of financial legacy you want to leave.

If you’re planning to retire in the near future, now is the time to get advice. A regulated financial adviser can help you weigh up your options, understand the impact on your income, and make sure your annuity works for both you and your loved ones.

It’s not just about peace of mind—it’s about making sure your money works as hard as it can in the years ahead.