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Retirees urged to register Lasting Power of Attorneys to avoid 'financial crisis'

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A report has been published, which urges retirees to register a Lasting Power of Attorney (LPA) to avoid a “later-life financial crisis”.

The study, by insurance company Zurich, estimates that four-fifths of retirees (345,000) presently enjoying pension freedoms will struggle in the future because they have no Lasting Power of Attorney. This will cause problems should they need financial help in the event of falling ill or losing their mental faculties.

The lack of legal authority for a loved one or trusted friend to make decisions on their behalf would mean the involvement of the Courts, who would be tasked with making the financial decisions for them.

Alistair Wilson, a savings expert at Zurich, was keen to stress the importance of a Lasting Power of Attorney and the role it can play in later life, particularly now that pension freedoms have been introduced.

Commenting on the report, he said: “Registering an LPA has become even more important since the pension reforms. Thousands of people are now making complex decisions on their pension into old age, when the risk of developing a sudden illness or condition such as dementia increases. Despite this, many are unprepared for a sudden health shock or a decline in their mental abilities. The time to set up a Lasting Power of Attorney is well before you need it, and pension providers should be highlighting this to their customers.

“With more and more people moving into drawdown, this is creating a ticking time bomb that could leave thousands of people facing a potential later-life financial crisis. It is vital that people plan for a time when managing their pension might become hard, or even impossible.”

MFG Solicitors’ Private Client team can assist in any matters relating to a Lasting Power of Attorney. Our experts also advise on any other corresponding aspects of law. For more information, contact us today.