The lasting power of attorney system has significant flaws and many people are confused as to how it works, research shows.
The survey by Which? suggested widespread confusion about how the process works and banks often causing avoidable problems for people registering as attorneys.
Lasting Power of Attorney (LPA) is a legal document where one person gives another the power to make financial decisions on their behalf if they ever lose mental capacity.
But Which? said it is concerned to find many people have a poor understanding of how it works and why it is needed.
An LPA can only be registered while an individual still has mental capacity – after that it is too late. But Which? found concerning evidence that many people do not know this.
The consumer champion surveyed 2,000 people across the UK between 5 and 9 November 2021. It found 85% said they know what LPA is, but exposed worrying gaps in their knowledge.
One in six (16%) mistakenly think that an individual loses access to their financial accounts once the legal document is registered.
Among those surveyed who do not have an LPA, seven in 10 (70%) said they were healthy so did not need one. Meanwhile, three quarters (77%) of people incorrectly thought an LPA could be set up at any time in life, suggesting they are at risk of putting it off until it is too late.
Only one in seven (15%) said they would give someone else power of attorney over their affairs, according to Which?.
"The creaking power of attorney system needs urgent improvement, particularly to address the public's lack of awareness of how the process works and the difficulties people face when registering with banks. This problem has been going on for years," Which? money editor Jenny Ross, said.
A quarter (26%) of people aged 18 to 34 and one in five (20%) who earn under £21,000 a year said they did not know what power of attorney was, compared to just 7% of those aged over 55 and one in 10 (10%) of those who earn over £56,000.
Which? also said its research has found over the years that attorneys encounter problems when registering with banks and other financial firms.
In a separate survey, Which? found that the common issues reported for more than 8,000 of its members with a registered LPA were a lack of knowledge among staff (60%), complexities in the process (38%) and delays (28%).
Most people (31%) who registered LPAs said banks were the most difficult to deal with. Many said banks lost LPA documents, failed to properly explain the registration process or required them to make unnecessary trips to a branch.
Which? said it heard from people who were asked to register in-branch in the middle of the Covid-19 pandemic, even at banks where online registration was an option.
"Nationwide does not let attorneys use telephone or app banking services, for example, while Tesco Bank does not give attorneys access to online banking," Which? said. "With HSBC, attorneys only have access to online banking if the donor does not. Other banks allow both the attorney and donor to have access."
Emily Deane, technical counsel at STEP (Society of Trust and Estate Practitioners), said: “We are urging the Ministry of Justice to increase resources immediately to counter these registration issues and a ‘fast-track' procedure and channel should be established to deal with urgent matters.”
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