New research from Canada Life reveals that only around one in six (17%) UK adults aged 40 or over have appointed a power of attorney (POA). A POA is a legal process whereby an individual appoints another person to formally act and make decisions on their behalf should they become incapacitated, or unable to do so.
The most common arrangement is called a Lasting Power of Attorney (LPA), with one in ten (10%) respondents from the research choosing this type of POA. An LPA may make decisions on behalf of another for financial decisions, health and care or both.
For those who have not appointed a POA (78% of those 40 or over), the top five reasons for not doing so were:
- A third (32%) said they haven’t appointed a POA because “I have full mental capacity”
- Three in 10 (30%) said they haven’t appointed a POA because “I’ve never thought about it”
- One in five (20%) said they haven’t because “I’m not in ill health”
- Over one in six (16%) said they haven’t because “I’m just procrastinating”
- One in eight (12%) said they haven’t because “It’s too expensive / I can’t afford a solicitor”
One in ten (10%) also wrongly believe that their partner or spouse will automatically be given power of attorney, rising to 17% among those who are married or in a civil partnership. In fact, it is usually up to the Court of Protection to decide, should the individual in question become incapacitated without a power of attorney in place.
For those who have appointed a POA (17% of those aged 40 or over), the top four reasons which prompted them to arrange this were:
- Four in 10 (39%) said “I did it at the same time as making a will”
- Almost one in six (14%) said “I have a friend/ relative with dementia and it prompted me to think about my own future”
- One in seven (13%) said “My financial adviser suggested I plan for the future”
- One in 10 (10%) said “I passed a significant birthday which made me want to plan for the future”
Nearly a quarter of respondents (22%) said that they have been appointed as a POA themselves. The top two most popular relations that these individuals are POA for, are parents (49%) and spouses (27%).
Reasons for agreeing to be a POA were generally altruistic. Over half (52%) of those who are a POA, said they wanted to give their loved one/s peace of mind, and around four in 10 (42%) said they felt a sense of responsibility to do it.
Sentiment was also generally positive towards being a POA, with the majority (32%) saying they were comforted that they could help. Furthermore, most (61%) said that on balance they were either really or somewhat glad to have agreed to be a POA. Only one in ten (11%) said they felt some level of regret.
John Chew, Technical Specialist – Tax, Trusts and Estate Planning, Canada Life said:
“It is worrying that very few people have appointed a power of attorney, and it is furthermore problematic that many believe that having full mental capacity is a good excuse to put this off. In reality, if you get to a stage where you are incapacitated then it will be too late, and the Court of Protection will appoint someone on your behalf. This is why it is essential to start the process when you are in good health and can make your own decisions.
Most people are pleased to be able to be appointed as a power of attorney, however if there is any reticence to ask a loved one out of concern of being a burden, you can appoint someone outside of your family or friends to be your power of attorney instead, such as a solicitor.
If you are concerned about paying for a solicitor, you can apply to register a power of attorney via gov.uk. However, as our data shows, many appoint a POA when making their will. Many solicitors will offer you the opportunity to register a POA when making a will, so make sure you discuss the available options with them.
Living longer can be a great advantage — but it also brings important responsibilities. Estate planning should be a key part of preparing for later life, including appointing a power of attorney, writing a will, and having honest conversations with loved ones about end-of-life wishes and the management of assets. Taking these steps early can ease future burdens and ensure your intentions are clearly understood.”
