Do I have to leave half my annuity to my ex-wife?

Lisa Vaughan
12 December 2018


I bought an annuity in August 2009, which said on the paperwork that I must buy a joint life with 50% of the annuity payable to my spouse on my death. I have queried this today and was told that this was due to legislation back then that is not necessary now. I am divorced and can’t change the beneficiary. Surely if legislation has changed I should be able to do this?

PC/Milton Keynes


It is impossible to comment on your particular annuity as I do not know anything about the original pension arrangement or why you were given only one annuity option.

Since 2002, there have been rules in place requiring insurers to inform their existing pension customers that they can buy an annuity on the open market. In 2014, the Financial Conduct Authority carried out a review of the annuity market following concerns that many consumers were still buying annuities from their current pension providers, which were not clearly explaining all of the options available to them.

As a result, providers have since been required to explain the potential benefits of shopping around or seeking guidance from a qualified financial adviser on the most suitable annuity for their circumstances.

You could have shopped around and sought professional advice. However, your pension provider, just like many providers at that time, may have been guilty of not clearly communicating the options available. Saying that, you were married at the point you took out the annuity, so it may have been the right thing to do.

A pension annuity provides you with an income, so I assume this would have been taken into account when your divorce settlement was being calculated.

It may be worth checking if your ex-wife was specifically named on the policy, because if the annuity was written on an ‘any spouse’ basis, then widow’s benefits may be payable to your legal spouse at the time of your death.

If the policy documents do not make the basis of your annuity clear, I would suggest you write to the annuity provider to request clarification.