Millions of Britons are facing poverty in retirement if their partners die first, according to new research.
The figures, from Prudential, show that more than half of couples over the age of 40 are at risk of leaving one partner penniless because both of them rely on one single retirement income.%VIRTUAL-SkimlinksPromo%
In fact, some 53% of couples in this age bracket have made no arrangements to ensure that when one partner dies, their pension will continue to pay an income to the surviving partner.
Women are the most at risk; one in five will depend entirely on their other half for a retirement income, compared with just 5% of men over 40.
However, a lack of preparation is common to both sexes, with one in seven Britons over the age of 40 unsure about where their income will come from when they stop working.
Prudential is therefore urging people to take the time to look into their retirement options, and consider taking out a 'joint life' annuity that continues to pay an income to a surviving spouse, partner or dependant after the annuitant dies.
Vince Smith-Hughes, retirement expert at Prudential, said: "For couples looking to enjoy a comfortable retirement, organising and agreeing their income options should be a priority – long-term financial planning can be even more important than managing day-to-day-finances.
"Having open and frequent conversations as a couple about your retirement planning is definitely an important first step."
As pensions and annuities are complicated - and the decisions you make about them will have a big impact on your future financial stability - it is probably sensible to take independent advice when looking at your options.
Over-40s at risk of living in poverty after partner dies
If, like many Britons, you have failed to save the cash you need to maintain a comfortable standard of living in retirement, one option is to sell your home and downsize to a smaller property, using the money leftover to cover your living costs.
If moving out of the family home is too much of a wrench, however, the good news is that equity release schemes allow you to stay in your house or flat while still using the equity built up in it to provide some extra cash. The downside of the schemes, which work a bit like mortgages, is that you may not have much left to pass on to any children or other relatives.
But that's a small price to pay for a reasonable standard of living. For more information, try Age UK on 0800 169 6565.
Choosing the right annuity can have a significant impact on your retirement income. And as with most pensions, you automatically have what's called an 'open-market option' (OMO), you can scour the market for the highest annuity rate.
It is worth checking what your pension provider is offering first, though, as some companies offer guaranteed rates for existing customers that are likely to beat those available elsewhere. The Pensions Advisory Service on 0300 123 1047 is a good place to get some free advice.
On retirement, most people convert their pension fund into a guaranteed income annuity that pays out the same amount every month for the rest of their lives.
However, you can also choose an increasing annuity that pays out smaller amounts in the first few years but offers larger payments further down the line. This may prove a wise move if the rate of inflation remains at over 2%.
It is now easier to work later in life because the "default retirement age" has been scrapped.
People approaching retirement age and worrying about money can therefore choose to work for a few years longer - potentially transforming their financial situation. Other than the extra income from working, these people can look forward to higher state pensions, and higher annuity rates due to their greater age.
They can also benefit from bigger tax allowances and the fact that they no longer have to pay National Insurance contributions. Check out this nidirect website for more details.
You could get a much better rate with an impaired-life annuity if you have a medical condition that is likely to reduce your life expectancy.
Incredibly, even snoring, which is a common symptom of Sleep Apnoea could have an impact.
According to figures from MGM Advantage, a man with this condition could receive an extra £12,000 retirement income over the course of their retirement - or £571.44 extra money each year. Click here to find out more.
To maximise your retirement income, it is vital to ensure that you are receiving all the benefits to which you are entitled. These include the basic State Pension, and in some cases, the additional State Pension.
If you are on a low income, you could also qualify for the guaranteed element of Pension Credit, while those with some savings may get the savings element of this benefit. For more information about these and other benefits such as the Winter Fuel Payment, click here.
Many older couples rely on the pension income of one person - often the man. Should that person die first, the other person can therefore be left in a difficult position financially.
One way to prevent financial hardship for the surviving person is to take out a joint life annuity that will continue to pay out up to 67% of the original payments to the surviving partner should one of them die.
The disadvantage of this approach, however, is that the rate you receive will be lower. Again, the Pensions Advisory Service on 0845 601 2923 is a useful first port of call if you are unsure what to do.