Martin Lewis has issued a "really blunt answer" to a couple, telling them they should spend £200 on a lasting power of attorney, warning that failing to do so could lead to "devastating consequences".
The money expert was speaking to Mags, a 73-year-old woman who has been with her husband for 14 years. The couple have kept separate bank accounts from the outset and she sought advice on how either one could take control of the other's finances if advancing age or deteriorating health made that necessary. She explained that a route Martin frequently recommends was "too expensive right now", but she wanted to arrange something promptly given their ages.
What is a lasting power of attorney?
On the latest episode of the Martin Lewis Podcast, Mags asked: "My question is what are the options left for us to ensure that either one of us is able to take charge of the other's finances before it's too late?"
Martin replied: "Forgive me with my really blunt answer" and explained it was something she should sort out urgently. He spoke about "nightmare stories" of people who had failed to set up a lasting power of attorney, which is a legal instrument allowing you to designate someone to assist you in making decisions, or to act on your behalf.
According to the gov.uk website, it "gives you more control over what happens to you if you have an accident or an illness and cannot make your own decisions".
Costs and alternatives
Martin, founder of the Money Saving Expert website, said: "It can be very difficult to get through. People tell me nightmare stories about it and it takes a long amount of time." He explained that without a power of attorney, people are forced to endure a lengthy legal process through the Court of Protection.
He acknowledged that using a solicitor can be costly, potentially setting you back between £400 and £750. You can register independently for £92 in England and Wales, and for £46 if you earn under £12,000 and can supply proof. However, Martin cautioned that completing them yourself can be challenging, and warned many applications are turned down.
Instead, he recommended spending a modest amount extra - roughly £100 each in total, or about £200 overall in Mags's situation. This option is the Which? Wills service, an award-winning offering from consumer watchdog Which?. Their specialist lawyers and paralegals can assist in arranging a lasting power of attorney.
Why it matters
When Mags asked about alternative options that were less expensive than a power of attorney, Martin's answer was straightforward. "None," he said. "Power of attorney. Sorry to be really blunt on this. That is exactly what a power of attorney does. If you do not have power of attorney, especially with your separate bank accounts and your separate finances, if one of you were to lose your faculties, so the other has to take over, you would have to go to the court of protection. To apply for it. It's massively more expensive than power of attorney."
He said a power of attorney costs £99 in Scotland and £189 in Northern Ireland. Urging Mags to heed his advice, he said: "If you forgive me, at your age, where the risks of losing faculties do increase with age, and with your separate bank accounts, this is a good use of money. I'm sorry. I'm sorry. I know you don't want to spend it, but do your power of attorney."
Martin argued that powers of attorney are even more important than a will, saying: "When you're alive, you might have the cost of your care, your mortgage might need paying if you're by yourself and all of those other things." He added: "Without a power of attorney, the Court of Protection takes a long time. The people you love trying to look after you can be locked out of your finances even to pay for your necessities, which is why while I think wills are incredibly important and the vast majority of people should have them, for me power of attorneys are even more important because the consequences of not having one can be devastating."
