At retirement, you need to consider whether joint life pension annuity rates might be better for you, in that your spouse also gets a pension annuity income out of the arrangement, which could be a sensible step to take. Here’s an example of a married man, aged 68, and with various pensions arrangements, but his wife, a fair bit younger at 51, has only modest pension arrangements. He wants to know if he could transfer some of his pension fund investments over to her to provide her with a pension. The straightforward and simple answer to this is ‘no’.
Existing pension rules do not allow pension funds to be transferred between people. However, it is possible to take up to a quarter of the pension fund as tax-free cash and hand that over. Another possibility is to set up a pension annuity with joint life annuity rates so that after he dies she continues to receive an income from the pension for the rest of her life. This scenario is possible as long as there are no ‘protected rights’ in the pension fund. The wife can use any money given to her however she wishes, including to fund a pension income in her own name. So there is an element of flexibility here, but transferring a pension fund is not permissible. It also needs to be noted that a joint life annuity will produce a lower starting income.