Couples are risking their retirement income by not talking about what would happen to their pension provision if one of them died, Prudential has warned.
According to Prudential's research, 52 per cent of adults aged 40 or older who have not yet retired have not made any provision for each other and are therefore at risk of losing their pension income if their partner dies.
The study found that 39 per cent of couples have no arrangements in place which would ensure that their pension income continues to be paid after the death of one partner, and 13 per cent said they do not know what would happen to their pension income or other investments in these circumstances.
Nearly half have made arrangements to ensure that a pension income will continue to be paid, with men more likely than women to have made these arrangements – the research shows that 56 per cent of men compared to 43 per cent of women have made sure the other will continue to receive a pension income in retirement.
Fewer than one in 20 couples have discussed the difference between joint or single life annuities, and it is time for couples to speak up or risk an underfunded retirement, Prudential has said.
A joint life annuity will pay an income to a spouse or dependent after the pension holder's death, and, instead of or as in addition to this, they can purchase a guarantee that the income will continue for a set period up to 10 years after their death.
Vince Smith-Hughes, head of pensions development at Prudential, commented: "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," he said. "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."
Those still working can also ensure that their partner receives their pension in the event of their death by telling their pension scheme provider in writing.
© Fair Investment Company Ltd