Speaking to crowds in St Peter’s Square in 2015, Pope Francis recalled the words of Benedict XVI during a visit to an old people’s home: “The quality of a society, I mean of a civilisation, is also judged by how it treats elderly people”.
According to the United Nations, the number of older persons worldwide is projected to more than double, reaching more than 1.5 billion in 2050. As life expectancy rises, it’s likely that your parents and grandparents will live longer than previous generations but may need additional care and support in their later years.
One way you can provide support to the older people in your life is to help them to manage their finances. This can help them to retain their independence for longer and can ensure they have the income and assets available to live their desired lifestyle.
So, ahead of the official UN International Day for Older Persons on 1 October, here are three ways you can offer practical financial help to the older people in your life.
1. Help them to switch their account if their local branch has closed
According to figures reported by the Evening Standard, more than 5,000 bank and building society branches closed between January 2015 and July 2023.
If you have older relatives who might struggle with travel due to anxiety or mobility issues, or they simply prefer to do their banking in person, the closure of their local branch could represent a real challenge.
In this case, helping a relative to switch their current account or other financial products to a new provider – perhaps someone who retains a local branch – could help them to retain their independence.
The Current Account Switch Guarantee means a new bank will switch your relative’s payments and transfer their balance, while their old bank will take care of closing their old account. And, all of this will happen in just a few days.
You could either accompany your relative to the branch and help them to complete the forms and provide the ID, or you could help them get online and switch this way – more about this below.
2. Consider a Lasting Power of Attorney
Another way that you can help an older person to manage their finances is through a Lasting Power of Attorney (LPA).
An LPA is a legal document that allows them to appoint an individual or individuals (known as “attorneys”) to make decisions on their behalf should they lose mental capacity.
For financial matters, the LPA also lets the individual delegate the management of their finances to their chosen attorney(s), even if they retain mental capacity.
There are two types of LPA:
- Financial LPA – This enables the attorney to manage the older person’s wealth with their consent, or if they lose mental capacity. The attorney can maintain a bank account, access savings, claim benefits, and deal with property matters
- Health and wellbeing LPA – This enables the attorney to make decisions that affect the older person’s health and wellbeing when they no longer have mental capacity. This might include decisions concerning their daily routine, medical care, moving them into a care home, or accessing (or denying) life-sustaining treatment.
If you put a financial LPA in place, your older relative has the peace of mind that there will be someone with their best interests at heart to make decisions about their money. They can then either choose to continue managing their finances, or delegate certain decisions to someone they trust.
You may want to encourage your relative to put an LPA in place sooner rather than later. Once an individual loses mental capacity they can no longer arrange an LPA, so it’s something to consider now.
3. Help them to manage their day-to-day money in the digital age
Figures from Statista show that more than 90% of UK adults used an online banking service in 2022.
With many “challenger” banks such as Revolut, Monzo and Starling Bank existing purely digitally, it’s harder than it has ever been to access traditional banking services.
For an older relative, this is an issue they might find confronting – especially if they are not technically proficient. According to Age UK figures published in the Guardian, 40% of over-75s don’t use the internet at all, and so struggle or are unable to access digital banking services.
This is an area where you may be able to help them in several ways.
Firstly, a financial LPA can be useful here. If you’re named as an attorney, you can register the LPA with the bank or building society and then help your relative to manage their finances straight away.
Alternatively, you could help your relative to switch to a bank that’s more suitable for their needs. This may be one that has a simple-to-use app or mobile banking service, or offers telephone banking that your relative can easily access.
Finally, you could help the older person by showing them how to use telephone, app, or online banking services. Many are user-friendly and have tutorials to help new users to get to grips with the systems. Some banks even offer free online courses or assistance to help empower less confident individuals to use online services.
Giving them confidence to bank online or through an app could help them to retain their independence, without having to rely on you entirely.
Get in touch
If you’d like help creating a financial plan to support an older relative – perhaps if you’re concerned that they may have an Inheritance Tax liability – then we can help. We work with many generations of client families to create a plan that works for all family members.
To find out more, please email firstname.lastname@example.org or call us on 01189 876655.
The Financial Conduct Authority does not regulate estate planning, tax planning or will writing.