Have you ever thought about how you and your family would manage your financial affairs if you couldn’t carry out everyday tasks for yourself? It’s a good idea to plan ahead for a time when you might not be physically or mentally able to manage your own finances, including your pension.

Power of attorney

A power of attorney is a legal document that allows someone to make decisions for you, or to act on your behalf if you’re no longer able or no longer wish to manage your own affairs.

There are different types of power of attorney, and you can set up more than one. You can only set up a power of attorney while you still have capacity, so it’s helpful to plan ahead.

• An ordinary power of attorney is suitable if you need cover for a temporary period (hospital stay or holiday). It covers decisions about your financial affairs and is valid while you have mental capacity.

• A lasting power of attorney (LPA) covers decisions about your financial affairs, or your health and care. It comes into effect if you lose mental capacity, or if you no longer want to make decisions for yourself. You should set up an LPA now if you want to make sure you’re covered in the future.

• Enduring powers of attorney (EPAs) were replaced by LPAs in October 2007. However, if you made and signed an EPA before 1 October 2007, it should still be valid.

Setting up a lasting power of attorney

When setting up a lasting power of attorney (LPA), you can specify that someone can help you straightaway or that the power will only come into force if you lose capacity, for example if you are diagnosed with dementia. In that case, you will continue to operate your financial affairs as usual and the power of attorney will only come into effect when you receive a diagnosis.

An LPA can cover decisions about your financial affairs. Find out more about how to set one up at gov.uk/power-of-attorney or seek advice from a solicitor.

For more information about powers of attorney, visit www.ageuk.org.uk/information-advice/money-legal/legal-issues/power-of-attorney