Financial News

Do You Understand What A Power Of Attorney Is?

A lack of understanding about powers of attorney is leading to distress for families that need help when loved ones can no longer cope.

Half of adults do not know about taking a power of attorney, and of those who are aware of the process, fewer than a third fully understand the meaning (30%).

Most have heard of a financial power of attorney (76%), but fewer than half (48%) know about a welfare power of attorney, which covers decisions such as end of life health care for a loved one.

A power of attorney allows people to appoint someone to make decisions on their behalf, should a time come when they lack the mental capacity to decide for themselves.

If the person has already lost mental capacity then the Court of Protection can appoint a deputy to make decisions for them.

Gender divide

Women seem to favour agreeing a power of attorney more than men.

A quarter (23%) of women have discussed setting one up compared to just one in six men (17%).

Men (18%) who haven’t discussed setting up a power of attorney were also more likely than women (8%) to say that they did not think they would ever need to set one up.

The study by financial firm Royal London also found families failed to talk about a power of attorney, with almost half (48%) of adults not thinking they are at an age when they need to think about it, despite three in 10 (34%) aged over 55.

One in five (19%) said they did not discuss it because they did not want to think about being unable to manage their own affairs.

Power of Attorney explained

Mona Patel, consumer spokesperson for the firm, said: “It may be uncomfortable to think about not having the mental capacity to make decisions, but it is important to plan in case this happens.

“While official figures show nearly 800,000 registrations were submitted last year in England and Wales, it’s concerning that only a third of people who have heard of a Power of Attorney fully understood how it works.

“Appointing a family member or trusted friend to make financial or welfare decisions on your behalf stops the responsibility falling to the state and loved ones then having to apply to the Court of Protection, which can be emotionally difficult, time consuming and expensive.”

Click here for a free guide explaining the Power of Attorney

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