Prudential reports pensions death risk for unprepared couples
Prudential has conducted new research* that reveals more than half of UK adults aged 40-plus and who are not yet retired are at risk of losing all or part of their private pension income if one partner dies because they are failing to make any pension provision for each other.
The study reveals 39 per cent of couples do not have arrangements in place to ensure that pension income continues to be paid after the death of one partner, and another 13 per cent do not know what will happen to their retirement income and other investments if their partner dies.
Only 48 per cent have made arrangements to ensure that pension income will continue to be paid and it is men who are more likely than women to have made sure that happens. The study found 56 per cent of men have put arrangements in place compared with 43 per cent of women.
Prudential has launched an online guide for couples at pru.co.uk/couplesconversations which provides a decade by decade countdown on the financial issues they may need to tackle.
Vince Smith-Hughes, head of pensions development at Prudential, said: "Talking about money can be difficult enough for many couples but clearly talking about death and money is a step too far for millions.
“But it’s time to speak up if more than half of all working couples aged 40-plus do not have arrangements in place to ensure pension income will continue after the death of one of them. Losing some or all of your income in retirement is a terrible risk to take and couples should think carefully about what happens in the event of one partner’s death, and seek advice where appropriate to ensure this eventuality is taken into account.”
Vince Smith-Hughes added: "You can choose a joint life annuity which will pay an income to a spouse or dependent after your death and alternatively or as well as you can purchase a guarantee that the income will continue for a set period up to 10 years after the death of an annuitant.
“For those still not yet retired it is also worth ensuring that whoever administers your pension scheme has written instructions to ensure the wishes of the member for disbursement of the pension fund upon death are known.”
But Prudential’s research shows just 31 per cent of non-retired UK adults aged 40-plus have discussed with their partners what happens to pensions and other assets in the event of one of them dying.
And only 4 per cent have talked with their partners about the difference between joint life and single life annuities - which stop paying when the purchaser dies - and joint life annuities which continue to pay after the death of one partner.
Prudential’s online guide covers topics such as making a will, discussing pensions and how much to save, talking about when to retire, working out retirement income, reviewing total savings, researching annuity options and when to buy, checking National Insurance contributions, talking about housing options, leaving an inheritance, and agreeing on long term care.
Notes to Editors
*Survey conducted by Research Plus between 6–14 July 2010 among 1,172 UK adults aged 40+
currently living with their spouse or partner. The research used an online methodology.
“Prudential” is a trading name of The Prudential Assurance Company Limited, which is registered in England and Wales. This name is also used by other companies within the Prudential Group, which between them provide a range of financial products including annuities, life assurance, investment bonds, pensions, a tax calculator and pension guide for those planning to retire. Registered Office at Laurence Pountney Hill, London EC4R 0HH. Registered number 15454. Authorised and regulated by the Financial Services Authority.
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