Call for joint annuities to be default

Partnership is urging Government ministers to look at making joint life annuities the default option for married couples.

Any person who fails to make an active decision on their retirement income receives a single-life annuity product from their provider.

Partnership chief executive Steve Groves (pictured) says: “The Treasury should look at default retirement products. If you are married, a joint-life annuity is more likely to be suitable, so that is something that needs to be looked at.”

The proposal could form part of a menu of policy options due to be set out by the International Longevity Centre thinktank as the industry tries to improve outcomes for people with small pension pots after the RDR.

Baroness Sally Greengross, who is chief executive at the thinktank, chaired a meeting last week with senior industry representatives to dis cuss the issue.

She says: “At the ILC, we are concerned that the retail distribution review could lead to a reduction in the availability of advice. We need to ensure that people with small pension pots do not lose access to advice altogether.”

Hargreaves Lansdown head of pensions research Tom McPhail says: “I do not think there should be a default at all. If people do not make an active decision to buy a pension, then their money should not go into a pension.”

Speaking at a Headlinemoney event in London this week, pensions minister Steve Webb said a joint annuity default was not being actively considered by the Government.