Each September, World Alzheimer’s Month – including World Alzheimer’s Day on 21 September – aims to raise dementia awareness and support people affected by the disease.
According to the Alzheimer’s Society, an estimated 982,000 people are living with dementia in the UK, and this is projected to rise to 1.4 million in 2040.
Caring for a relative with a degenerative illness can be challenging. It’s not just dementia either – you may have relatives who require help with many aspects of their day-to-day life. Indeed, Carers UK estimates that there are 5.7 million unpaid carers across the UK.
If you have elderly relatives, your care responsibilities may also extend to providing support with their finances. So, here are three practical ways you can support an older friend or family member to manage their money.
1. Help them manage their day-to-day banking
In June 2024, Lloyds Banking Group announced that it planned to close 190 branches in 2024 and a further 47 in 2025.
News about banks and building societies closing locations has been commonplace in recent years. Indeed, the Guardian reports that more than 6,000 bank branches in the UK have closed since 2009 – equivalent to around 60% of the national network that was in place in 2015.
Many of these branches are in smaller towns, villages or suburbs, so it’s rarely been harder for an individual to access their bank. This can hit older people particularly hard as they often prefer transacting in person at their local branch.
There are two ways you can help an older relative to manage their day-to-day banking.
Help them switch their account if their local branch has closed
If their bank has closed their local branch, but there is a competitor nearby, you could help them to switch their account.
The Current Account Switching Guarantee makes it easy to change a current account, and the banks will deal with the transfer or any direct debits, standing orders, and credit balance.
Help them to get online or use telephone banking
If you’re used to transacting by telephone or online, it can pay to help a relative by showing them how to log in to their account, and how to use the online services available.
Many banks also offer “digital helpers” who can spend time helping an older person to get to grips with managing their money through a smartphone app or home computer.
2. Set up a Lasting Power of Attorney
If your relative is prepared to delegate the responsibility for managing their finances or making decisions about their care and welfare to a trusted person, then a Lasting Power of Attorney (LPA) may be suitable.
A financial affairs LPA enables the donor to appoint one or more attorneys to manage their finances on their behalf. They can delegate these tasks even if they retain mental capacity, or if they are diagnosed with an illness such as dementia or Alzheimer’s.
If you set up an LPA, the attorney(s) can make decisions about things like:
- Selling a property
- Paying a mortgage and bills
- Collecting benefits
- Arranging house repairs.
Importantly, you must put an LPA in place before an individual loses mental capacity. So, it could be worth considering taking this step now and giving your loved one the peace of mind that someone they trust will be able to act for them in financial matters.
It is possible to set up an LPA and register it with the Office of the Public Guardian yourself, although it can pay to seek legal advice to ensure any document is watertight and set up as your relative requires.
3. Encourage them to talk about their needs
Money remains a taboo subject among many families. It can be a particularly tricky subject to broach with older relatives who may not be used to sharing information about their personal finances.
However, it is important to have these conversations to ensure they have sufficient help for their retirement and any unforeseen expenses, such as later-life care costs.
It may also be useful to discuss their legacy so you can start planning for any Inheritance Tax issues that you may face on their passing.
Begin any conversations by expressing your genuine care and concern for their wellbeing without being critical or judgmental about their financial decisions. This is likely to be an ongoing discussion, so building trust is essential. Encourage your relatives to share their financial concerns, fears and goals without interruption.
Working with a professional, such as a financial planner, can add value here as you can demonstrate that your intention is to help, not take control. An independent third party can provide useful insights and an impartial view.
Get in touch
We work with many client families to create a bespoke financial plan that works for all generations. If you have older relatives that would benefit from Chartered advice, please get in touch to find out how we can help.
Email hello@sovereign-ifa.co.uk or call us on 01454 416653.
Please note
This article is for general information only and does not constitute advice. The information is aimed at retail clients only.
The Financial Conduct Authority does not regulate estate planning, tax planning, Lasting Powers of Attorney, or will writing.
