Cash point

Four out of five people who have opted to draw down savings using the new pension freedoms face a potential later-life financial crisis, according to insurer Zurich.

That’s because they have not yet set up a lasting power of attorney.

This financial planning blind spot could prevent an individual trusted by the pensioner from immediately stepping in to help manage their finances should they suddenly fall ill or lose mental capacity.

The Alzheimer’s Society estimates more than a million Brits will be living with dementia by 2025.

Without this vital legal document families could be locked out of a loved one’s finances and may face a lengthy court process before they can step in.

An LPA gives another adult (or several) the legal authority to handle decisions on your behalf if you become unable to make them yourself. There are two different types of LPA – health and welfare, and property and financial affairs – each requiring a separate form.

Find out more and download forms at gov.uk/power-of-attorney.

LPAs must be registered with the Office of the Public Guardian. Get help on 0300 456 0300.