Most over-40s don’t have a power of attorney

What would you do if you couldn’t make financial decisions for yourself?

It’s possible that you could become seriously ill or injured in the future - and no longer be able to manage your own money.

In that case, you can choose a friend or relative to look after your financial affairs.

This is known as a power of attorney and can give peace of mind to you and your loved ones.

But according to research by Canada Life, many people aren’t taking up this option.

Less than one in five (17%) UK adults aged 40 or over (17%) have set up a power of attorney.

And that means they’re completely unprepared if they lose capacity to make their own decisions.

What is a power of attorney?

There are two types of Lasting Powers of Attorney (LPAs):

Property and financial affairs LPA

This option lets you pick a trusted person take care of day-to-day things like bank accounts and bills, as well as make big decisions, such as putting your house on the market.

Health and welfare LPA

If you lose mental capacity, this option means a trusted person can make decisions on your behalf about your healthcare, living arrangements and daily routine.

If you need help completing the power of attorney forms, you can get help from the Office of the Public Guardian.

Why don’t most people have a power of attorney?

A power of attorney is like an insurance policy, so you’re prepared if unexpected and unpleasant surprises come your way.

But many, it seems, are only looking at the short-term, rather than what might happen in the future.

When asked why they haven’t appointed a power of attorney yet, over-40s without one gave several reasons, including:

• “I have full mental capacity” - 32%
• “I’ve never thought about it” - 30%
• “I’m not in ill health” - 20%
• “I’m just procrastinating” - 16%
• “It’s too expensive / I can’t afford a solicitor” - 12%

Meanwhile, one in 10 people said they believe their spouse or partner would automatically get power of attorney.

But that’s not true.

If you don’t have a legal document clearly stating who can make decisions for you, this right doesn’t automatically pass to family members.

Why do people choose to set up a power of attorney?

Among the 17% of over-40s who do have a power of attorney, there were many different reasons for taking action.

For example:

• 39% said they did at the same time as making a will
• 14% said they were prompted to do it because they have a friend/relative with dementia
• 14% acted because a financial adviser recommended it
• 10% were prompted by a milestone birthday

What happens if I don’t have a power of attorney?

If you become unable to make decisions and haven’t set up a power of attorney, the Court of Protection decides who should act for you. 

This can be a lengthy, costly and stressful process for your loved ones - and there’s no guarantee they’ll choose the person you would’ve picked.

So setting up a power of attorney yourself means you’re in control from the outset and there’ll be no added stress and uncertainty further down the line.