Managing money in your later years

As people get older, or suffer from poor health, they may need help with handling their finances. They may just be less mobile than they used to be or are having to spend some time in hospital. Or they may have been diagnosed with an illness, such as dementia. So what are the options when managing their finances becomes more difficult?

The options if they still have the capacity to make decisions

• Create a joint account with a carer, friend or relative, who they trust, so they have access to their money to pay bills etc. This account could be set up for cheques only, with all cheques having to be countersigned by the account holder for added security.
• If they receive benefits or a State Pension then they can arrange to have these paid by giro cheque. If they sign the back of the cheque then the trusted person can cash these cheques on their behalf.
• Arrange for all their bills to be paid by direct debit which will make sure that they are paid on time without causing any stress.
• If they have a Post Office account then they can arrange for a trusted person to have permanent access.
• I would warn, however, against sharing a PIN number with anybody as this could compromise the security of the account

What are the options if they need something longer term or lack the capacity to make decisions?

If they need to make more long-term plans, due to illness such as dementia, then they may consider creating a Power of Attorney. There are two types of Power of Attorney.

Ordinary Power of Attorney

• This is normally set up for a limited period of time and is suitable for someone who is due to spend some time in hospital or may be away for an extended holiday
• Only valid while the donor has still got the mental capacity to make their own decisions
• The power given to the attorney can be limited to certain assets only