Martin Lewis: Do you have a Power of Attorney? Here's why it’s so important and how to get one
Do you have a Power of Attorney? It’s a crucial financial protection, probably more important than a will. MoneySavingExpert.com founder Martin Lewis explains why Power of Attorney is so important, how to get one and more in the latest episode of ITV's The Martin Lewis Money Show Live.
The video clip and the transcript are below, but you can also see our Power of Attorney guide, plus which banks are best if you have one.
ITV's The Martin Lewis Money Show Live – Tuesday 14 March 2023
From The Martin Lewis Money Show Live on Tuesday 14 March 2023, courtesy of ITV. All rights reserved. Watch the full episode on ITVX.
Transcript of what Martin Lewis said on the show…
Here's a direct transcript of what Martin said, though we've broken it up into sections for ease.
How Power of Attorney works and why it's important
Audience member: "Hi, so my question is at what age should you nominate a Power of Attorney and how do I go about doing so?
Martin Lewis: "How old are you?"
Audience member: "25."
Martin: "That's a good age. Simple as that. 25 would be good. Let me go to the next part of my big briefing, and I will explain to you. Here we go.
"Look, I think in many ways, a Power of Attorney is more important than a will, because if you die, you die and the money is going to go on to other people and you won't use it anymore.
"But if you lose your faculties, if you lose your ability to look after yourself mentally, then the question is what happens to your finances? And the truth is, let's say it's a dementia or an accident or a stroke - severe ones - don't assume your family can access your money, not even if it's the money needed to pay for your care.
"It can be locked away without anyone being able to touch it. To get it they'll need to apply via the Court of Protection or equivalent. That's a hassle. It's long. It's costly. You might not get the right person appointed that you would have wanted to take over your faculties. [speaking to co-host Angelica Bell] I actually sent you a note someone sent me on Facebook on this because it's quite important.
Angelica: "It's really important. It's from Bridget and she says, 'my father was suffering with dementia when my mother died. She did everything and he was lost. One day he didn't know his ATM pin, got flustered and the bank suspended his account. He was unable to do anything. We applied to get the Court of Protection and it's horrendously expensive and extremely slow. He died before we got anywhere so make sure a power of attorney is in place.'"
The best way to get a Power of Attorney, if you can, is through a solicitor
Martin: "So to answer your question, why not do it now and have it ready if you've got the assets and you need it. Now look, if there's other people who could look after you, if something happened to you, that might be a different scenario.
"So how does the Power of Attorney work? Well, you nominate a friend or relative to take over your affairs if you lose your faculties, IF. It doesn't mean you're giving up control now.
"I've had a Power of Attorney since my thirties. I have, thankfully, no foreseeability of losing my faculties. No one takes control of my finances, I'm in control of it, but I have a Power of Attorney to do that. To get when you apply via Gov.uk. It £82, slightly different prices in England and Wales, Scotland and Northern Ireland.
"The best way, if you can, is to get a solicitor to do it, but that will cost £200 to £500, so you have to make that decision. There's partial help from Which? - what that means is, you fill in a template online and then they get a specialist to check it for you rather than having it fully drafted by a solicitor.
"I need to say, Power of Attorneys are not perfect. There are delays at the moment, but my big message it is better to have a Power of Attorney than not. I'm not promising it's a panacea, but it's better than nothing. Now, of course, I talk about financial power of attorneys, because this is what I do.
"But there's also a separate health and welfare one, and exactly how it works varies across the UK, where you give somebody the ability to control your health and welfare decisions, if you lose your faculties too. And I would urge you to look at that one as well. It is important.
"I'm going to go back over here to our tame solicitor. Melinda. Hello, Melinda."
Melinda Giles, solicitor at Giles Wilson and The Law Society Wills Committee: "Hello, Martin."
Martin: "Okay, look, the biggest single set of questions we've had about Power of Attorney revolves around what I'm about to ask you now.
"What controls are in place to ensure the person acting with Power of Attorney is acting in their best interests? Cases of a sibling with a Power of Attorney helping themselves, not accountable to other family members. We've had other people asking what if someone abuses it and tries to take the money for themselves?
"So what are the protections in the Power of Attorney system when someone's lost their faculties?"
There are controls in place if someone is acting in bad faith, but it's not perfect
Melinda: "So obviously a Power of Attorney document is an extremely powerful tool. You're giving someone the potential to manage all your finances, but the point is you're giving that power. So when you make the power, you should choose that the protective part, such as notifying somebody when they're going to use it.
Martin: "So I have that. I have my Power of Attorney set up and then I have two totally separate, independent people who would be notified if they were going to use the Power of Attorney who would then have the responsibility to raise objections if they felt that I hadn't lost my faculties or it wasn't sensible to be done.
Melinda: "Yes, exactly. I mean, the whole point is you must choose somebody that you fully trust or more than one person. You can put that in place. You can put guidance in place and restrictions on how they can use it as well.
Martin: "But it's not perfect."
Melinda: "It's not perfect and unfortunately, should that sad situation occur where the siblings are suspicious that their father is being financially abused by the person chosen - you go through the process of making a report to the Office of the Public Guardian, to the local authority for safeguarding, and then they check it out.
Martin: "Thank you. Mary emailed, 'I'm the appointed person for my brother who's blind and has special needs. I've recently been told I should really have a Power of Attorney, but the government website makes it appear that my brother must complete the application which he is unable to do. So how do I proceed?'"
Melinda: "It does depend upon the level of his special needs and the level of his understanding. If he can be supported and does understand that he's making a Power of Attorney, who he's choosing and the extent of those powers, then he can make one. It doesn't mean that he knows how to manage his money.
"But the blind aspect, there are special provisions such as reading over the document, witnessing somebody signing at his direction. But if there isn't understanding the required level, then it's a Court of Protection order.
Martin: "Kevin. Have I got Kevin in here? Where's Kevin? You have a quick question on this one."
It's a good safeguard to have more than one person as your power of attorney
Audience member Kevin: "Yeah. Is it better to have one person as a Power of Attorney or multiple people? And if it's multiple people, how are potential disputes resolved?
Melinda: "If you have more than one person, then you can appoint them so that they have to make all decisions together, which could be problematic as you've discussed - and also, if one of them dies, then the whole arrangement fails because you can't have it proceeding with one surviving attorney.
"But you can have jointly and severally so that either one of them can actually deal with anything at one point, and the surviving one can continue. So that's a good thing."
Martin: "It's a good safeguard having two if you possibly can.
"Very quickly, some people have Enduring Power of Attorneys that have been replaced and they're asking, should they now get a Lasting Power of Attorney? Is it worth changing it if everything's right?"
Melinda: "If you're still happy with your attorneys, continue with the enduring power.
Once you become Power of Attorney, make sure you register with the banks as soon as possible
Martin: "Right then I have another page I want to bring up on this. So this is about once your Power of Attorney is active - someone's lost their faculties and you have become their attorney, you're taking over for them.
"Now, the first thing you should do is register your Power of Attorney with the banks and services straight away. Don't wait until the moment you actually need to use it because it takes time to register and then you'll have to wait to be able to do anything.
"If you're going into a branch, book an appointment, because it takes time or you can ask them for their dedicated Power of Attorney phone lines that some have. Be careful with the copies of your Power of Attorney. Better to get a solicitor to certify them and then you can have copies which you can give to a bank rather than the original ones.
"And worth noting, if it's a Power of Attorney registered after January 2016, then you can get a free online code from Gov.uk, which some banks will accept as evidence of a Power of Attorney.
"Now, I've done some research very recently on how good banks are. If you've got a Power of Attorney, they're getting much better at dealing with it.
"I was actually really impressed by the survey results, 12,000 people we did. 60% plus said 'great' for TSB, Lloyds and Halifax. 50% plus said 'great' for First Direct, Santander, Nationwide and NatWest. And actually most of the others are pretty good. So if you're worried about how the big banks will respond, most of them are actually pretty good if you've got Power of Attorney."
Angelica: "Quick question for you before we go to the break, Martin this is from Claire - please can you advise on best savings accounts which allow Power of Attorney access?"
Martin: "CHIP 3.4%, easy access. Sainsbury's 3.1% easy access. OakNorth Bank 4.3% - on a one-year fixed, all allow Power of Attorney.
"But I don't have survey data on whether they're actually good at dealing with it. But purely on rate, those would be my top three picks of top savings and do Power of Attorney. Phew, mental database was working, well done!"
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