Irwin Mitchell Survey Finds Half of Over 40s Don’t Feel Prepared For Their Financial Future

New research shows the vast majority of British people say they are concerned about dementia and would want family to look after their assets if they were hit by the disease – but most also admit to making no provision to ensure that’s the case.

A survey of over 1,000 people by law firm Irwin Mitchell has revealed that only 13% of over 40s have a Lasting Power of Attorney but without one it could mean a legal headache for family or friends trying to help manage the finances of a loved one.

More than 225,000 people are diagnosed with dementia each year with the number of sufferers expected to top 1m by 2025.

Paula Myers, an expert wills, trusts and probate dispute partner at Irwin Mitchell, says many legal battles over wills and estates arise because of issues relating to dementia – but the new research shows people are not planning ahead and choosing who they would like to make decisions for them in future.

Irwin Mitchell’s survey of over 1,000 people across the UK reveals: 

• Only 13% of over 40s have a Lasting Power of Attorney (LPA), a legal document that enables friends or family to manage a person’s finances 
• This is despite almost 80% of people saying they wanted family members to look after their finances in the event of dementia
• Almost half of those surveyed did not have a will 
• Two thirds of people say they have not spoken to family members about how they might wish their finances and assets to be managed in the event that they are deemed no longer able to make their own decisions
• While 15% say they haven’t talked to anyone about planning their finances for later life, only 8% have visited a solicitor and just 5% have spoken to a financial advisor or accountant.

The survey was conducted to coincide with this year's Dementia Awareness Week, 15 – 21 May 2016, which is being held to encourage people who are worried about dementia to confront their worries by addressing dementia directly and talk to each other as well as seeking support from the Alzheimer's Society.

Expert Opinion

“Our research paints a worrying picture about the lack of planning for later life financial and legal issues which could potentially cause serious headaches for families members to sort out in future.

“Failing to have a lasting power of attorney can cause a legal headache over who should be making decisions. Family and friends may dispute who is best placed to make the decisions and the court of protection could step in.

“An LPA takes away that worry and gives people the knowledge that the people they want to make decisions on their behalf will be able to in the event they are found to have lost mental capacity.

“It’s really important that people making a will or LPA speak to their family members and explain their decisions and wishes. This can avoid lengthy disputes in future as their intentions are less of a shock and people know what to expect. Our research shows that while many people are concerned about losing mental capacity in the future, and know that they would like family members to look after their assets, hardly anyone is doing anything to prepare for any future issues.

“If someone loses mental capacity but doesn’t have an LPA, big decisions about finances and healthcare may need to be made by the Court of Protection to ensure they are legally sound and deemed to be in the best interests of the person concerned.” Paula Myers - Partner