Millions of UK adults at risk of being locked out of spouse’s finances

A large proportion of UK adults are currently at risk of costly and time-consuming measures if they were to lose a spouse, Scottish Widows has warned.

This comes as the firm published research that revealed 95% of UK adults are aware of power of attorney, but just one in three (33%) don’t know how it is used in practice.

A lasting power of attorney is a legal document that lets an individual appoint somebody else to help them make decisions or to make decisions for them on their behalf.

However, Scottish Widows warned that this lack of awareness could be why it has a lower uptake compared to other forms of financial protection.

While three quarters (74%) of adults say they think power of attorney is important, only half of that number (37%) have one in place. By contrast, three quarters (76%) of people in a relationship have discussed wills and trusts with their spouse.

The findings also revealed that less than half (41%) of married couples have power of attorney in place, while one in four (24%) have no plans to do so, which could suggest that many married couples see taking this measure as unnecessary.

Scottish Widows said it believes financial advisers have a “key role to play” in explaining the concept of a power of attorney and busting some of the myths that are holding back the uptake.

Protection director at Scottish Widows, Rose St Louis, said: “Our research has shown that couples often overlook a crucial step in financial planning for the future and don’t set up a power of attorney. It can be difficult to have conversations about finances and preparing for the future, and financial advisers have a crucial role to play.

“Whether it’s helping explain the practical benefits of setting up a power of attorney, outlining potential difficulties that may be avoided further down the line, or referring them to an estate planner or solicitor who can help with an application for power of attorney, clients value guidance they can trust.”

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