Monthly Archives: September 2017



 More than two out of five worried about losing control of finances and nearly half worry about their partner

  • But more than half would appoint partner to look after their finances
  • Applications for Lasting Powers of Attorney increase to 650,000 applications a year

Retirement savers are becoming increasingly concerned about the risk of not being able to control their finances because of the onset of dementia but are failing to act, new research* from Key Retirement shows.

The nationwide study by the financial specialist found 43% of over-55s are extremely concerned about the financial impact of suffering dementia in later life rising to nearly half (47%) who worry about their partner being unable to access their money.

But the research among more than 1,000 over-55s shows just one in eight (12%) have acted by setting up Lasting Power of Attorneys (LPAs) to ensure important decisions can still be taken on their behalf. Another 39% say they are considering setting up LPAs but have yet to do so.

The importance of having LPAs in place is growing now that millions of retirement savers and equity release customers may need to manage their finances into later life.

The risks of not having LPAs in place are potentially huge – families will need to apply to the Court of Protection for a Deputyship Order which can typically take many months during which finances can be frozen, or other important decisions may be delayed. The process can also be expensive starting from £400 for an application plus a further £850 + VAT for the work done up to and including the Deputyship Order, and a further £100 for an assessment of the deputy. If no deputy can be found a professional deputy will be appointed and for this the charge will be £1,500 + VAT for the first year, and £1,185 + VAT for each year thereafter.

Key’s study shows more than half (54%) of over-55s would trust their partner or spouse to look after their finances if they were mentally incapacitated while just 28% would trust their son or daughter.

But the study found widespread confusion about what access people have to their spouses’ or partners’ financial or legal affairs without an LPA as the table below shows, headed by 36% thinking that without an LPA they can decide on their healthcare.

Decide healthcare for partner 36%
Access bank accounts 26%
Query utility bills in partners’ name 22%
Speak to pension providers 21%
Speak to credit card providers 19%


Dean Mirfin, Chief Product Officer at Key Retirement, commented: “Numbers affected by dementia are set to double over the next 25 years and it’s essential that families avoid a costly and time consuming court process.

“Anyone who is taking advantage of pension freedoms or has a drawdown equity release scheme risks having their money frozen if they do not have LPAs until the Court of Protection appoints attorneys. For equity release this means that access to any drawdown facility will be suspended whilst waiting on the court. LPAs are not just about money, they are also about being able to make those important decisions about someone’s healthcare should the need arise.

“Not only is it more cost effective in the long term to do so, you are also ensuring that those who you trust the most are certain to be the ones making important decisions about your finances and your health and welfare when you need them most.”

Data shows around 650,000 applications for LPAs were made last year and around 2.5 million are currently in place**. However around 14,500*** applications are made each year to the Court of Protection.

A Lasting Power of Attorney (LPA) is a legal document which gives the person or persons of choice the power to deal with an individual’s affairs. These trusted people will then become legally appointed attorneys and will be able to use these documents to act on the person’s behalf whenever necessary. There are two types – the property and financial affairs LPA covering money and property matters, which can be used at any time and even made temporary use of, and the health and welfare LPA covering healthcare decisions which can only be used if people lose mental capacity.

Assessing Care Needs and Putting The Right People In Charge

Assessing Care Needs – When Needs Fluctuate.

Assessing care needs can be tough, especially with the immense pressure on Social Workers and the NHS.  Bearing in mind that the family have NO RIGHTS unless there is a Health and Welfare Lasting Power in place, only the person whose needs are being assessed has any rights. And if the carers decide they do not have the ability to make decisions, only the Court of Protection has the right to overrule them. Mental capacity is not constant with most people.

And the standard by which it is judged will vary depending on the urgency and importance of the decision.  There is a massive difference in the standard required to decide which coat to wear today, and deciding whether or not to have a life-saving operation or to sell your home.  The ability to make decisions can change very rapidly, and people may be lapse in and out of capacity quite quickly.  It is quite a complex test and is essentially a legal test rather than anything else, so you can see why Social Workers may have difficulty making relatively snap decisions with people they may hardly know.   The family, given the authority, are in a far better position to make such decisions.

In 2014, a survey of Social Workers showed that more than half of the decisions made by Social Workers about peoples ability to make decisions were wrong.  So arming the family with at least Health & Welfare Lasting Power of Attorney in place.

The video is fairly wide-ranging, but I think you will find it worth watching.

Fluctuating needs and fluctuating mental capacity are a serious problem.  But the situation is far better if both types of Lasting Power of Attorney are in place, so the right people can make decisions or push for extra resources or help. Much better to have power on your side rather than risk having to appeal to the Court of Protection who will tend to accept Healthcare professionals views, even though they don’t really know what your wishes would have been.

Unprepared – 93 Percent of the Adult Population

Unprepared – 93 Percent of the Adult Population


As local authorities face the financial impact of the increase in the living wage on care budgets – a welcome but financially difficult move – specialist Insurer Partnership warns there may be more to come. Indeed, according to their latest Care Report, the proportion of people who would be happy to reduce their assets below the £23,250 threshold in order to ensure councils pays for their long-term care has almost doubled in two years from 23% (2013) to 43% (2015).

At the Legal Planning Group, Stephen Pett, Client Services Director said “Another recent survey said that 86% of people are not legally prepared for things going wrong.  Losing control of your life is bad enough, but handing control to Social Services, not your family is (apparently) the preferred route of more than nine in ten people who don’t know any better. Are you one of them? Almost certainly!  Use the contact form at the foot of the page to ask for our 2 Minute Guide to Legal Planning, and see just how vulnerable you and your loved ones are!”

With an estimated 126,000 entering care each year, Partnership suggests that this could see councils shouldering up to an additional £1.62 billion burden in England alone if all of those who say they intend to spend their wealth do so. Add this to the anticipated billion pound living wage bill and local services will be under more pressure than ever.

Councils in the South East (£338 million) and East (£211 million) are likely to be most impacted due to the relatively high number of costly care homes in these regions. People in the North East (47%) – already the region with the highest number of people claiming local authority support for care – are most likely to say they would spend their wealth and fall back on the state for support.

Impact of Deliberate Deprivation of Assets on Local Councils:


% who would deliberately deprive themselves

No. people entering Care Each year

Potential Cost per region

North East




North West








West Midlands




East Midlands












South East




South West








Jim Boyd, Director of Corporate Affairs at Partnership explains:

“While the second tranche of the Care Act with its associated implications has been delayed until 2020, councils still face a significant financial burden – which is set to grow considerably if even a third of these people deliberately deprive themselves of their assets.   Spending or giving away your wealth before you need care might seem attractive but it does limit your options and means that you are likely to have far less control over your future than you may hope.

“It could also be financially devastating for councils who are facing the financial impact of the introduction of the living wage on care budgets. While making wages more sustainable is naturally to be welcomed, budgets are already squeezed and local authorities are going to be carefully considering how to manage this amongst other demands on their finances. This is unlikely to lead to a satisfactory outcome for anyone.

“Those consumers who would prefer to have more choice but wish to safeguard some of their assets need to speak to a specialist financial adviser. They are fully qualified to not only show people how to structure their finances to meet their care cost obligations but also how to ring-fence money to leave to their families. This may involve the use of an immediate needs annuity – the only financial product specifically designed for ensuring the cost of care can be met as it guarantees to pay an income to meet a person’s care fees no matter how long they live.”

Stephen Pett added “The role of the financial adviser is very specific: you need to speak to legal professionals such as ourselves to set up the best possible protection for yourself and your assets.  There is no legal requirement for you to leave Social Services in charge of your affairs, and billing you for their time!”