If you have had first-hand experience of dementia, you’ll know just how devastating a disease it can be.

With life expectancy increasing, dementia is becoming more prevalent. Indeed, the Alzheimer’s Society estimates that 1 in 3 people born in the UK today will be diagnosed with it in their lifetime, and that there will be 1.4 million people with dementia by 2040.

Financial management is just one of the many difficulties that dementia can pose to everyday life, but it’s important to stay on top of it to avoid facing challenges in other areas.

Research by the National Institute on Aging shows that financial difficulties may even start before a formal diagnosis.

In one study, people who later developed dementia had lower-than-average credit scores as early as two-and-a-half years before their diagnosis. They were also more likely to have missed credit card payments up to six years prior.

So, with dementia diagnoses on the rise, it could be a good idea to work with a financial planner to ensure you’re prepared should you or your partner be affected. Early planning can help protect your assets, maintain financial stability, and ensure your wishes are respected, no matter what the future holds.

Read on to discover four ways a financial planner can help if you or a loved one develops dementia.

1. Register a Lasting Power of Attorney

A Lasting Power of Attorney (LPA) is a legal document that allows you to appoint someone you trust to make decisions on your behalf if you lose capacity, as you might if you develop dementia.

In England, there are two types of LPA:

• Property and financial affairs
• Health and welfare.

Having a property and financial affairs LPA means your chosen attorney can step in to help with tasks like managing bank accounts, paying bills, or overseeing investments.

It’s important to note that you need to register your LPA before you lose capacity. If you wait too long and your dementia progresses too far, your loved ones will need to apply to the Court of Protection for the authority to act on your behalf, which can be a very long process.

A financial planner can help you create a clear, well-structured financial plan that your future LPA can easily understand and manage if needed. They can also support you in finding a suitable solicitor to legally register your LPA, and later work closely with your LPA to help ensure your financial wishes are carried out as intended.

2. Simplify your finances

Over the course of a lifetime, your finances can grow increasingly complex as you establish different income sources, investments, and loans.

Dementia can make this significantly more difficult. As memory and cognitive function decline, even routine financial tasks can become overwhelming, increasing the risk of missed payments, confusion, or financial vulnerability.

A financial planner can help simplify and organise your finances to make them easier to manage. This might include consolidating accounts, automating payments, creating a clear overview of income and expenses, and ensuring everything is in place for someone else to step in if needed.

3. Create a plan to cover the cost of later-life care

During the later stages of dementia, you may require specialist care. Depending on the level of support you need, this can be costly, so it’s important to plan ahead where possible.

The Alzheimer’s Society reports that a person with dementia spends an average of around £100,000 on their care over their lifetime.

A financial planner can help you prepare for the potential costs of care. They can assess your current financial situation, explore different care funding options, and build a personalised plan that ensures you have the resources in place should you need support in the future.

They can also help you consider options like setting up trusts or making use of gifting strategies to reduce your exposure to Inheritance Tax and care costs. By doing this early, you maintain greater control over how your wealth is used and passed on, rather than leaving it to be decided on your behalf.

You can read more about how financial planning can help you prepare for care in our previous article on the topic.

4. Review and update your will

There is often a significant period between a dementia diagnosis and the later stages of the condition. However, you can only update your will while you are still considered to have full mental capacity.

That means if you delay making changes, you may not be able to do so further down the line, even though you may experience significant life events, such as welcoming a new grandchild.

Taking action early and updating your will ensures your wishes are clearly reflected and legally upheld, offering peace of mind for both you and your loved ones.

You can also choose to write a letter of wishes, which is a non-legally binding document that provides guidance to your executors on how you’d like your estate to be managed if your circumstances change but you can’t update your will. While it doesn’t carry legal weight, it can offer helpful context and make your intentions clearer.

A financial planner can work alongside your solicitor to help prompt these conversations and ensure your financial arrangements and estate plans remain aligned.

To speak to a financial planner, get in touch.

Email info@blueskyifas.co.uk or call us on 01189 876655.

Please note

This article is for general information only and does not constitute advice. The information is aimed at retail clients only.

All information is correct at the time of writing and is subject to change in the future.

Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.

The Financial Conduct Authority does not regulate estate planning, trusts, Lasting Powers of Attorney, or will writing.

A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance.

The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.