What happens to an annuity when you die?

If you were to pass away, what happens to an annuity will depend on the options you’ve chosen at purchase. Here are some common scenarios:

• Payments stop by default – For standard single-life annuities, payments will end when you die. So, no further income will be paid to beneficiaries.
• Guaranteed periods – An optional feature is to include guaranteed payment periods, like 5 or 10 years. If you dies within this timeframe, your payments will continue or be paid as a lump sum to your estate or beneficiary until the end of the guaranteed period.
• Joint life annuities – With joint life annuities, income continues to a spouse or partner after your death.
• Value protection – This is an optional feature you can add to an annuity. It ensures that if you die before receiving the full value of your original purchase price, the remaining amount would be paid to your estate or beneficiaries.
• Spousal or dependant benefits – Some annuities allow income to be paid to dependants, such as children, for a set period or until they reach a certain age.

Even if you don’t choose extra features, naming beneficiaries helps make sure any remaining benefits go to the right person quickly and without hassle.

It’s also worth noting that having added benefits or features can lower your annuity income.

Having conversations with your spouse or partner before getting an annuity is important because it has a long-term impact.

While 36% of couples knew about the details of their partners pension, in our 2025 Retirement Report with Age UK, almost two thirds admitted they didn’t have important conversations about managing finances if one became ill or died.^{Footnote [1]}

Our National Annuity Day survey showed that people believed that it was very important for an annuity to provide income for a spouse or partner if the purchaser died shortly after starting it.^{Footnote [2]}

Talking openly can help you both understand:

• what happens to an annuity income after death
• whether features, such as joint life annuities, guaranteed periods or value protection, are right for you
• how to nominate beneficiaries to avoid delays and complications.

When you buy an annuity, consider what happens to the income after you die. It doesn’t automatically go to a partner unless you set it up that way.

Certain annuities can provide an income to continue for a spouse or dependent after death, but this typically required you selecting a joint life annuity or adding specific features to ensure continues financial security for your family.

Nominating beneficiaries helps your annuity provider work out who to continue payments to when you die (if applicable).

84% of people haven't checked if their partner is listed as a beneficiary, and over half (64%) haven't discussed what happens if one partner dies.

Here are five tips on how to start the conversation:

1.      Begin early and be honest

Try not to wait until retirement is around the corner. Discuss your choices and what the plans are after death.

2.      Review and update beneficiary nominations

Make sure your annuity providers have the correct details for your beneficiaries. This will help avoid delays and that your wishes are followed.

3.      Share key details

Chat with your partner so you both know where all the documents are located.

4.      Ask the right questions

Questions like 'do we need a joint life annuity? or 'who should be nominated as a beneficiary?' are very important questions to consider.

5.      Involve family or a trusted adviser

If you’re unsure, consider speaking to a financial adviser or involve family members in the discussion. Professional guidance might help you make informed decisions.