Research has found that almost half of UK adults wouldn't trust their relatives to manage their money for them. But despite this, more and more people are entering into informal financial arrangements with family members. We explain how you can give someone legal authority to manage your money for you in a safe and secure way, under the supervision of a dedicated Government body.
In a recent survey we asked 2000 Britons over the age of 45 to tell us who they would trust to manage their money. Almost half (44%) of the people we spoke to told us that they wouldn't fully trust a close relative to look after their finances for them. What's more, 35% told us that there's one relative in particular that they definitely wouldn't trust to take care of their financial affairs.
Why Aren't Family Members Trusted?
The relatives that people are most wary of entrusting with their money are siblings and, perhaps more surprisingly, sons and daughters. In addition, almost a third said that they wouldn't trust a friend to manage their money for them either.
There were two main reasons cited behind this lack of trust:
- 14% said that their feel their loved one isn't responsible enough with their own money, so couldn't be trusted to manage someone else's
- 11% said that they had concerns their loved one would borrow money from them and fail to repay it
But People Are Giving Relatives Access to Their Money
Despite this wariness, there is a growing trend in the UK of people granting loved ones access to their finances through informal arrangements. The most popular routes that people take include sharing their bank account or online banking details with a family member, or opening joint bank accounts with relatives.
A quarter of the over-45s that we spoke to told us that they have access to a family member's bank account (who isn't their spouse). Most of these have access to their relative's bank card or log in details for their online banking.
While these arrangements may seem like a quick and easy solution if you're no longer able to get to the bank or manage your own finances, an arrangement like this can put both yourself and your family member at risk.
Your finances could be at risk as the activity of your family member is unregulated and unsupervised, and your family member will have little to no legal protection, as they have been acting outside of the law. This means that if there are any discrepancies in your accounts after you die, even if they have been acting in your best interests they could still face allegations of impropriety.
See our article for more information on the Dangers of Informal Financial Arrangements with Relatives.
The Safe, Secure & Legal Way to Let Loved Ones Manage Your Money
The best way to allow a friend or family member to take care of your financial affairs on your behalf is with a Lasting Power of Attorney (LPA). This is a legal document which you can use to appoint someone you trust as your attorney.
With a Property and Financial Affairs LPA your attorney will have the legal authority to take care of your money matters for you. Their activity will be overseen and supervised by the Office of the Public Guardian, which is a Government body. This means that your money will be safe and secure, and your attorney will have legal protection as they will be acting within the parameters of the law.
For initial advice about making an LPA call our Will writers on 03306069591 or contact us online and we will help you.