Is spouse approval required to purchase a single life annuity?

[PrimSec]

I’ve always thought that in the UK getting married would largely ensure your marital assets would be shared. Whether you outlived your spouse or got divorced, you’d get your share at the relevant point, and this would include part of your spouse’s pension.

But upon retiring could your spouse go and purchase a single life annuity with their pension without your knowledge or approval, thereby depriving you of your share of that pension? I can imagine the scenario where a wife (let’s face it, it’s more commonly the wife) would be a SAHM and be relying on their husband’s pension for later life. Could the husband be allowed to just buy himself an annuity just for him without her having any say in it?

Just musing really. DH and I are far from retirement age, all fine in our marriage, and both have similar pensions, so shouldn’t affect me directly. But if that’s not the case, a dependant spouse would need to be pretty careful around retirement age…

Short answer is yes they could, although decent advisers (if used) / pension providers should point out the risks.

I believe that a person can take out all their pension at 55 (57 if younger) & spend the lot !

Annuities are no longer compulsory

I would suggest that each individual person makes their own pension & savings arrangements

They could take the whole person at once but would of course pay tax on it

Of course they can, but in the small print will be details of what happens to that annuity on death. It may become part of the person's estate and inherited by the beneficiary or beneficiaries in their will, or (and I think this may still be the case) that the person taking out the annuity can specify who receives the benefit from it once they are gone. And of course they could name anybody.

There is a misunderstanding, often demonstrated on this site, that spouses acquire a share of each others assets when married. This is not the case. Each spouse continues to own their own property and can use it as they wish. The Married Women’s Property Acts gave this right to women and are a cornerstone of feminism. I think the misconception arises because marital assets can be redistributed on divorce and claims made on death. Of course spouses can choose to jointly own property, have joint accounts etc but that does not apply to pensions. Marriage can be helpful for the financially dependant partner but they are still potentially vulnerable.

I purchased a single life annuity without anyone's approval. The advisor mentioned to me that my spouse would not get anything after my death, I said I understood. As it happens, my spouse did know about the annuity, but I was not asked anything about that.

Also what@Mia85said, married people can own their own property and use it as they wish.

Thanks for the replies!

That's an interesting point about married women explicitly being given the right to own their own property. I actually didn't think that was possible (not just for women, for men as well). I thought being married meant your spouse could effectively claim half of anything you own (in the case of a sufficiently long marriage).

I still find it a bit odd that if you divorce, your spouse's pension is considered an asset that you're entitled to half of, but if you remain married until retirement they can transform it into something you have no claim to (and which would become worthless if they died before you). I guess it's similar to them pissing all your savings up the wall on gambling/experiences/useless crap/<insert any non-sellable asset here>, which of course the law does not protect you from either.

DH and I have explicitly discussed in the past how it could be more efficient for one or the other to put more into their pension (depending on tax situations or employer matching). We figured it made no difference who's pot it was actually in as we would either inherit it upon death or have to split it on divorce. We've luckily ended up with roughly similar pots, but sounds like we were quite wrong about it and one of us could have seriously screwed the other over if things turned acrimonous around the time of retirement!

Actually I was interested in the sole ownership question and found this:
https://www.theguardian.com/money/2020/jul/06/can-i-buy-a-flat-in-my-name-only-and-exclude-my-husband

Sounds like it's not clear cut and you would have to argue that the property is a non-matrimonial property. It then says that “the courts’ current approach is generally not to make orders requiring former spouses to share property acquired by gift or inheritance or acquired before marriage unless that property is required to meet financial needs”. However if it was aquired during the marriage, it sounds like you'd struggle to be considered the sole owner even if it was in your sole name.

According to google , the annuity would count as an asset in divorce.
I’d be more concerned about my spouse choosing to let me lose his income on his death. Unless your spouse has a healthy pension, or you have good life insurance, choosing an annuity with no spouse protection is an awful thing to even consider.

Yes, exactly! They could be made to share it whilst they're alive, but once they die you would be left with nothing. I'm surprised there isn't a duty of care on the pension provider to make sure the spouse gives their agreement for this (and so the spouse could then go after the pension provider if they failed to do the proper checks). But a PP above confirmed they were able to buy a single annuity without any questions.

There was meant to be an act of Parliament to do ensure that spouses were considered but it never saw the light of day.

It’s completely clear cut. Spouses can be sole owners of property. If they divorce their (matrimonial) property can be redistributed, regardless of whether it was owned solely or jointly. That does not change the fact that married people can own property and deal with it as they wish.

What I meant was that "solely owning" a non-matrimonial property when married doesn't sound like it 100% guarantees it will stay wholy yours (unlike if you were unmarried). Given the "unless it's required to meet financial needs” bit, there would always be a (admitedly small) chance that your spouse could eventually have a claim on it. I guess as sole owner I could however make any decisions about it, eg to sell, without my spouse's agreement.

This has been quite informative, so thank you. I did not realise it was even possible to have a non-matrimonial property at all. Which is interesting as I am likely to inherit a property and had assumed DH would be entitled to half of my share of it. Although as I said when I started this thread, all is fine in our marriage, so this should hopefully never be relevant!

Ah interesting, so it was indeed seen as a potential problem. I guess it's (hopefully) quite an unlikely scenario so not really a priority.

Because the ones I have looked at are spectacularly bad value. It has been much more cost effective to build in a long guarantee period. This will obviously change when the guarantee period will be included in the estate from April 2027. This will turn our planning into a massive challenge.

I don’t think it was a rare occurrence. I think a lot of men bought single life annuities and their widows were left in poverty upon their deaths.

If you consider how little political will there is to sort out child maintenance and ensure women and children don’t live in poverty you might start to join the dots on what class of person is being prioritised here.

My DH has a single life annuity in payment & I had no interaction with the provider, he just ticked the box!
(It’s part of our overall planning as I have a bigger DB which he would inherit 50% of if I pre-deceased him so not a problem)

It’s similar to the fact that, if I divorce my husband, my assets are considered marital assets which can be divided up, but if I die I can leave them to anyone I like (subject to a dependency claim).