With March marking Free Wills Month, Scottish Widows is urging families to think beyond wills when it comes to long-term financial planning, with new research showing that millions of married couples don’t have a power of attorney in place.
Data shows that although 95% of UK adults are aware of power of attorney, one in three (33%) don’t know how it’s used in practice, leaving a large proportion at risk of costly and time-consuming measures if they lost a spouse.
This lack of awareness could be why it has a lower uptake compared to other forms of financial protection. While three quarters (74%) of Brits say they think power of attorney is important, only half of that number (37%) have one in place. In contrast, three quarters (76%) of people in a relationship have discussed wills and trusts with their spouse.
A power of attorney is a legal document that allows a nominated person to make decisions for you, or act on your behalf, if you’re no longer able. It is vital for being able to manage financial assets like mortgages, bills and investments.
Less than half (41%) of married couples have power of attorney in place, while one in four (24%) have no plans to do so. This suggests that many married couples see taking this measure as unnecessary and could have a mistaken belief that power of attorney is automatic for married couples.
It is also an issue that disproportionately affects same-sex married couples, among whom awareness of power of attorney’s importance is higher than the population average (87% compared to 76%) but uptake is lower (30% compared to 41%).
Rose St Louis, Protection Director at Scottish Widows, said: “Free Wills Month is the perfect time to tackle some life admin, making sure you have the right plans in place to protect your assets and loved ones.
“Our research shows that more than a third (37%) of people are overlooking a crucial step and haven’t set up a power of attorney, yet doing this alongside a will makes sure that your wishes will be met, giving you peace of mind. Couples shouldn’t assume that marriage is a catch-all for protection as it could prove to be an expensive mistake to try and navigate later in life.
“We know that half (49%) of people struggle to talk about long-term finances, and it might be difficult to think about, but breaking that taboo ensures you are protected, today and in the future.
“Speaking to an impartial, professional financial adviser is always an option to help you understand wills and power of attorney and your family’s financial future. Financial may even be able to refer you to an estate planner or solicitor.”