Fewer than half (46%) of couples over the age of 40 in the UK have made arrangements to ensure that one partner will continue to receive a retirement income after the other dies, according to new research from Prudential.
Women over 40 are most at risk with one in five (21%) currently planning to depend entirely on their other half for a retirement income, compared with just five% of men over 40. Overall, in 13% of over-40s couples one partner (male or female) will be entirely reliant on the other’s pension to provide an income in retirement.
The Prudential study found that 53% of couples aged over 40 have made no arrangements to ensure that when one partner dies, their pension will continue to pay an income to the surviving partner. More than a quarter (28%) of couples have yet to discuss the impact on pension arrangements of one partner’s death, while 19% have at least made a will but no other financial plans.
The retirement risks faced by many couples are further highlighted by the fact that 41% admit they have never discussed how they will turn their pension savings into an income in retirement. A further 19% have discussed it but couldn’t agree on the best option, and less than a third (30%) of couples have reached a decision on the best retirement income option. However, only 10% plan to purchase a ‘joint life’ annuity – where a surviving spouse, partner or dependant will continue to receive an income after the annuitant dies.