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When planning for later life, there are many important factors to consider. Having enough money to get you through retirement is often at the top of the list. Living a retirement packed with purpose and meaning is something our clients also tell us is important.

When it comes to planning for later life, you need to consider the legal aspects of retirement planning as well as the financial and lifestyle factors. One particularly difficult issue to consider is who will take responsibility for making your financial and healthcare decisions, should you no longer be able to make these for yourself.

This issue of losing mental capacity in later life is as unpleasant to think about as death; for some, ‘losing your marbles’ is an even more troubling thought than end of life planning.

According to some new research, people are putting off this important aspect of retirement planning as they can’t trust their family members to manage their finances on their behalf.

The study by Co-op Legal Services found that 79% of over 45s do not have a lasting power of attorney in place. A lasting power of attorney is a legal document that lets you (the ‘donor’) appoint people (known as ‘attorneys’) to make decisions on your behalf.

It comes in two types; a health and welfare lasting power of attorney – which allows your attorney to make decisions about things like your daily routine and medical care – and a property and financial affairs lasting power of attorney – which lets you attorney manage your financial affairs, pay bills and collect state benefits.

Once you choose a suitable attorney who you are confident can manage your affairs, you fill in certain forms to create the lasting power of attorney, or alternatively speak to a solicitor who will draw it up on your behalf.

The study also found that 74% of people aged between 65 and 74, and 67% of those aged 75 to 84, don’t have a lasting power of attorney in place. One of the big reasons for this lack of later life planning is the inability to find a trusted family member who could take on this role of attorney. 35% of over 45s said this was the main reason for not putting a lasting power of attorney in place.

When those surveyed were asked how they feel about a family member having access to their personal finances, only around a half said they would fully trust them.

14% said their loved one isn’t responsible with their own personal financial planning, so they wouldn’t trust them to manage their own money and financial affairs. A further 11% said they would worry about a family member borrowing their money and not returning it.

This sounds a little more like ‘stealing’ than ‘borrowing’, and it’s why the use of a lasting power of attorney comes with strict rules and guidelines. In terms of those relations over 45 year olds deem least trustworthy, almost a third wouldn’t trust a friend to manage their finances for them.

19% would have concerns over a sibling managing their money and a further 18% wouldn’t trust their sons or daughters. Despite this widespread lack of trust in family members, 37% of those who don’t yet have a lasting power of attorney in place said they still plan to get one. A similar number said they are not interested in putting a lasting power of attorney in place.

“It’s concerning that so many people are not protecting themselves by properly planning ahead for later life. “Whilst our research shows that part of the reason is due to people not knowing who to fully trust to make important decisions on their behalf, there is clearly still a serious lack of awareness of the importance and benefits of putting a lasting power of attorney in place. “A lasting power of attorney is a legally recognised way for a person to choose trusted individuals to make decisions about their finances and also their personal welfare which, most importantly, continues in force even after that person becomes unable to make such decisions themselves.” If planning for later life is on your agenda, do talk to us about the various things you need to consider. As part of the Financial Planning process, we work with our clients to help them make important decisions, including around the appointment of an attorney


James Antoniou, Head of Wills at the Co-op
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