LPA system needs “urgent improvement”

LPA system needs “urgent improvement”

Consumer watchdog Which? has published a report highlighting significant flaws in the lasting power of attorney (LPA) system in the UK.

The research reveals that the “creaking” system is in desperate need of improvement, citing lack of public understanding and administrative red tape as just some of the barriers that hamper appointed attorneys.

In a poll of 2000 people across the UK, Which? found that 85% knew what LPA is, but just 15% said they would give someone else power of attorney over their affairs. Of those, 16% incorrectly thought they would lose access to their financial accounts upon registering an LPA, rather than when they become unable to manage themselves. Additionally, 77% of people incorrectly thought an LPA could be set up at any time.

The Which? research also highlighted problems reported by attorneys when dealing with banks and other financial organisations. A separate poll of 8000 Which? members revealed that 60% had experienced issues relating to lack of knowledge of LPAs amongst bank staff, and 28% experienced delays in the process. Complaints such as lost documents, unnecessary in-person branch visits and failure to explain processes are all highlighted in the report.

Which? has now called on the OPG for improvement and consistent industry standards, as well as the modernising of processes.

Jenny Ross, Which?, commented:

“People who take on the responsibility of helping a family member or friend to deal with their financial affairs should not have to jump through hoops when dealing with banks, but our research reveals many are still facing an uphill struggle to put the legal arrangement in place.

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.”

Emily Deane, Technical Counsel, STEP, commented:

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. We are calling on the OPG to do more to end the emotional, financial and physical abuse of older or vulnerable people, and protect them from controlling or coercive behaviour. The Government also needs to focus on educating and informing the public about LPAs and why they are so important.”

SFE Chair and Managing Director of Culver Law, Michael Culver, says:

The legal sector has recognised that there are issues regarding the understanding and handling of financial and property lasting powers of attorneys (LPAs) at banks. 

SFE, as part of our work with the Vulnerable Banking Group, has worked closely with the UK’s leading banks to improve standards and increase awareness of the needs of vulnerable and bereaved people and the professionals and carers who support them. 

An LPA is a powerful legal document that allows an attorney (of your choice) to make decisions about how to spend your money and manage your assets if you are unable to do so yourself. This includes paying your bills, care home fees and living expenses. It is crucial that staff at banks understand how these are implemented and what their limitations are.

There’s a long journey ahead, however, the sector is taking positive steps to rectify these issues and banking institutions are responding positively to our guidance. We’ve worked closely with them to develop and advise on policy changes. Some banks have already begun implementing these changes in branches across the country.

Annmarie Forster, lawyer at BDB Pitmans, said:

As solicitors, we always recommend that clients consider making Lasting Powers of Attorney as part of their wider estate planning, regardless of age. 

There are now two main ways of making LPAs. People can make LPAs by using the OPG’s self-service system, which involves completing an online application. Alternatively, they can take legal advice and have the LPAs drafted with tailored clauses which reflect their circumstances. Either way, LPAs must be registered by the OPG before they can be used by attorneys and this process is currently taking at least 20 weeks to complete. The current delays in registration can cause difficulty, particularly where an elderly relative is going into care and needs assistance with their finances and health decisions. We would certainly welcome the introduction of a fast-tracked service for registration in urgent cases such as this.”

Forster continued:

Clients are often also frustrated by the lack of consistency in how banks deal with attorneys. Banks and financial institutions should accept instructions from attorneys on receipt of a certified copy of an LPA, but some banks require the donor and attorney to be physically present at the bank, or require them to sign additional forms of authority. It is also common for banks to refuse to allow an attorney to use online banking if the donor did not use the service. This can make the task of managing another person’s finances more onerous as the attorney is prevented from managing the other person’s accounts in the way that they would manage their own.

We hope that the government carries forward its proposals to modernise LPAs so that there is more awareness about the process for making and using them for individuals and financial organisations.”

The MOJ launched a consultation last year exploring the use of digital channels to improve and ameliorate LPA processes whilst safeguarding against fraud and abuse. The government’s response to the consultation is expected to publish in spring.

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1 Comment

  • It’s one thing for an Attorney to have issues when the LPA is in their hands but it’s the uphill struggle to get that far for some of my Clients. We have had untold delays with some documents, lack of promised call-backs and in some cases, total absence of any correspondence to guage progress of a registration. Hours of waiting on ‘hold’ and failure to respond to e-mail enquiries means that many of us in the industry are wasting a deal of time and patience.

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