Marion and Tom Hinde from Ellesmere Port, Cheshire, had envisioned a future filled with adventures in a camper van, touring the landscapes of Britain and France as they embraced retirement.
However, their plans changed drastically in 2016 when Tom, then 54, began experiencing significant memory lapses and unusual mood changes. Marion, who is now 57 and works as a secretary, recounted, “It began gradually. He would search for tools in the garage and mistakenly accuse me of moving them.”
By 2017, Tom, a former petty officer in the Royal Navy, was diagnosed with Alzheimer’s disease, a form of dementia characterized by memory loss, confusion, and alterations in personality. Faced with this unexpected challenge, the couple found themselves unprepared, watching their retirement aspirations crumble.
In light of his condition, Tom opted for early retirement, just shy of completing his 30 years of service with the Navy, while Marion adjusted her work schedule to provide care for him. Rather than realizing their travel dreams, they utilized Tom’s £30,000 tax-free pension lump sum to eliminate their mortgage debt. To make medical and financial decisions for Tom, Marion sought power of attorney in 2017. Currently, they rely on Tom’s Navy pension, which provides around £1,200 a month post-tax, alongside personal independence payments from the government. They also secured a £30 life insurance policy through Royal London to cover funeral costs, which totals £9,000.
At 62, Tom can still manage basic tasks like dressing himself and making tea, yet he grapples with numerical concepts and finding directions. Their son, Kieran, who works as a tyre fitter, lives with them to provide support.
This situation starkly contrasts with their aspirations for a vibrant and fulfilling retirement.
“Our income has effectively halved,” Marion explains. “We have to manage within a tighter budget. Our vacations have drastically diminished; we haven’t traveled at all this year.”
Many families find themselves navigating unpredicted futures, but there are preparatory steps that can be helpful.
Understanding Life with Dementia
According to NHS estimates, over 944,000 individuals in the UK are currently living with dementia, with this number projected to surpass one million by 2030 and reach 1.6 million by 2050. Many will endure this condition for years, which means more families, like the Hindes, will need to address the financial implications of dementia on various facets of life, including employment, banking, insurance, and transportation.
The number of online power of attorney applications surged from 15,600 in the 2015-16 tax year to an astounding 507,200 in 2023-24. A lasting power of attorney (POA) enables someone to manage your financial or healthcare affairs when you can no longer do so yourself. In the previous fiscal year, there were approximately 777,000 successful POA applications.
Financial institutions, insurers, and governmental entities are adapting to an aging society. Nationwide has initiated trial dementia clinics in 200 of its branches in collaboration with Dementia UK, offering expert medical advice to assist individuals navigating this challenging condition. These services are available to everyone, not limited to Nationwide clients.
Research from the Alzheimer’s Society indicates that 76 percent of individuals with dementia struggle with financial management. This encompasses issues from unpaid bills to falling victim to scams or having a diminished pension due to premature retirement.
Tim Beanland from the charity noted, “Dementia may alter a person’s spending habits and hinder their money management skills. Individuals with dementia can be particularly susceptible to scams, as the ability to evaluate risks becomes more difficult.”
If you or a loved one receives a dementia diagnosis, consider these crucial areas of focus:
Setting Up a Power of Attorney
Establishing a lasting power of attorney before someone with dementia loses their mental capacity is crucial. Without it, decisive actions may require lengthy and expensive court intervention.
This legal arrangement grants another person control over your financial or medical affairs, or both. You can arrange for separate attorneys for financial decisions and healthcare. Each application incurs a fee of £82.
With a financial power of attorney, your designated attorney can manage matters like home sales, mortgage payments, bills, and home repairs even while you still have mental capacity. You can define the extent of authority granted to your attorney, and you can revoke this power anytime you retain mental capacity by informing your attorney and the Office of the Public Guardian (OPG).
The OPG indicates that processing a power of attorney application averages 16 weeks, which is double the target timeline.
Insurance Considerations
It’s important to alert your car insurance provider about a dementia diagnosis, as this could potentially impact your premiums.
When applying for life insurance, disclosing all pertinent pre-existing medical conditions, including dementia, is essential, as failing to do so might invalidate your policy. The Association of British Insurers (ABI) noted that for existing life insurance policies, customers generally don’t have to inform insurers about changes in health but might choose to do so as their communication requirements evolve.
For policies like travel and home insurance, there are less clear guidelines, but the ABI suggests notifying your insurer of any medical diagnoses or investigations related to dementia or other conditions promptly. If you’re unsure about disclosure requirements, review your policy’s terms or consult your insurer.
However, you are not obligated to disclose results from genetic tests indicating disease predisposition, except for life insurance over £500,000 if you had a predictive test for Huntington’s disease and are specifically asked.
Managing Financial Transactions
For individuals struggling to remember their PIN, discussing options with their bank regarding a chip and signature card can facilitate purchases by signing instead of entering a PIN.
If you wish to manage your bank account with assistance from a trusted friend or family member without establishing a power of attorney, consider requesting a third-party mandate from your bank to allow limited account oversight. This arrangement can be revoked whenever necessary.
Addressing Payment Issues
A study released in May by economists from the Federal Reserve Bank of New York and Georgetown University, along with Equifax, revealed that dementia patients were 17 percent more likely to miss mortgage payments and 24 percent more likely to miss credit card payments during the year prior to their diagnosis.
Individuals with dementia are generally held accountable for their debts, similar to any adult. However, if it can be established that a person lacked the capacity to manage their finances when accruing debt, there may be grounds to nullify a contract or loan in accordance with the Mental Capacity Act, assuming the lender was aware or should have been aware of the individual’s incapacity.
In instances of missed payments resulting in credit score impacts, banks may assist in rectifying the situation. Financial institutions and the government have a legal obligation to approach individuals with dementia empathetically under the Mental Health Act.
Pensions and Benefits Insights
Retiring earlier than planned diminishes retirement savings and may prevent access to pensions until reaching the legal age threshold (55 for most plans, rising to 57 by 2028). Many pension plans allow early access for illnesses; therefore, inquiries are recommended.
Marion emphasized the importance of early diagnosis, advising, “If you suspect something is wrong, see a doctor for an assessment right away. We were fortunate; our doctor referred us to the memory clinic. If you are younger, securing an early diagnosis may be more challenging.”
You may qualify for personal independence payments if under the state pension age (currently 66, increasing to 67 in 2028). These are intended to support individuals with daily living or mobility needs, based on individual requirements rather than diagnosis, and are not means-tested. Payments range from £28.70 to £184.30 weekly, typically requiring regular assessments for continued eligibility.
For seniors above state pension age, Attendance Allowance may be available depending on specific needs, providing £72.65 weekly for daytime or nighttime assistance, and £108.55 weekly for comprehensive help day and night, or for terminally ill individuals.
Caretakers attending to someone with dementia for a minimum of 35 hours weekly may also qualify for carer’s allowance of £81.90 weekly.
Beware of Scams
It is paramount to notify your bank or building society about a dementia diagnosis. This registration enables extra precautions to prevent falling victim to scams. Banks are more likely to reimburse victims of scams if they are aware of the customer’s condition.