Retirees are being urged to ensure they have a Power of Attorney (PoA) in place before they take advantage of recent pension freedoms to manage their retirement savings themselves.
Ensuring this important future-planning document is in place will mean that their nominated Attorney will be able to step in and help the retiree manage their financial affairs should they suddenly become ill or lack the mental capacity to do so themselves.
However, according to Zurich, as many as 345,000 retirees using income drawdown to fund their retirement have not yet organised a PoA.
The findings highlight the scale of an issue which has emerged since the Government scrapped rules compelling people to buy an annuity at retirement. Twice as many people are now choosing drawdown over annuities, giving them the responsibility of managing their income in retirement. If the gap continues to grow at the current rate, Zurich estimates it could leave 1.7 million retirees at risk by 2025.
According to the Alzheimer’s Society, there are currently 850,000 people in the UK living with dementia. This could increase to over one million by 2025, and potentially double to two million by 2051. However, Zurich found just one in five (21%) people who have moved into drawdown since the pension reforms have registered a PoA.
“Thousands of people are now making complex decisions on their pension into old age, when the risk of developing a sudden illness or condition such as dementia increases,” explained Alistair Wilson, a savings expert at Zurich. “Despite this, many are unprepared for a sudden health shock or a decline in their mental abilities.”
He added that the best time to register a PoA is well before it is needed.
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Based in Glasgow, we help clients throughout Scotland, including from Aberdeen, Ayrshire, Dundee, East Kilbride, Edinburgh, Paisley and Stirling. If you would like to discuss a Power of Attorney issue with an expert executry solicitor at Wilson & Fish, please do not hesitate to contact us today on 0141 222 7951 or complete our online enquiry form.