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The government scrapped the rules compelling retirees to buy an annuity, more than 345,000 are using income drawdown to fund their retirement. Yet, four in five retirees have not made a LPA to authorise a trusted person to make decisions on their behalf if they lose mental capacity and cannot make decisions themselves.
A common misconception is that a “next of kin” will be able to make decisions on their behalf however this is not the case and in the absence of a registered LPA, an application will have to be made to the court for a Deputyship Order which could take months and costs several thousand pounds.
Zurich warned that twice as many people now are choosing drawdown over annuities giving individuals the responsibility of managing their own income on retirement. If the trend continues, it is estimated that 1.7 million retirees could be at risk by 2025.
For more information about LPAs please see below: