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Spouse approval is urged for single-life annuities

Spouses could be forced to get written consent from their partners before buying single-life annuities under a rule change called for by the Equal Opportunities Commission and Age Concern.

An EOC-sponsored amendment to the Pensions Bill was withdrawn by Labour MP Vera Baird last week after the Government said it would look at ways of getting round the technical problems raised by the proposal.

If the Government fails to take action, the EOC says it will attempt to readdress the issue once the House of Lords considers the bill.

Currently, only 19 per cent of married people have joint annuities, according to the ABI, with 81 per cent opting for higher initial income but potentially leaving surviving spouses short.

The EOC is particularly concerned at the effect of single-life annuities on women – who are historically far poorer in retirement than men – as defined-contribution arrangements, which are legally required to provide for surviving spouses, are increasingly replaced by money-purchase arrangements.

Speaking in a debate in the House of Commons, Work and Pensions Parliamentary under-secretary Chris Pond said: “The amendment works with the grain of both our agenda of informed choice and our determination to ensure justice for women in pension matters.”

Equal Opportunities Commission chief executive Caroline Slocock says: “As we move away from defined-benefit pensions which provide for surviving spouses, we need to introduce something that involves the partner in this important decision. Pensions are recognised in divorce as jointly held property so why doesn&#39t the annuity system?”

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