Advisers have a crucial role to play in raising awareness about the importance of setting up a power of attorney, according to Rose St Louis, protection director of Scottish Widows.
St Louis’s comments follow research involving 2,000 adults conducted by the insurer which found that while 95% were aware of power of attorney (PoA), a third (33%) did not know how it was used in practice.
The provider speculated the lack of awareness could be why PoA has a lower uptake compared to other forms of financial protection.
While three quarters (74%) of respondents said they thought power of attorney was important, only half of that number (37%) had one in place.
In contrast, a similar number (76%) of people in a relationship had discussed wills and trusts with their spouse. However, fewer than half (41%) of married couples had power of attorney in place, while one in four (24%) had no plans to do so.
But the research also found this issue disproportionately affected same-sex married couples. Whle awareness of power of attorney’s importance was higher than the population average (87% compared to 76%), the uptake was considerably lower (30% compared to 41%).
St Louis (pictured) said: “Our research has shown that couples often overlook a crucial step in financial planning for the future and don’t set up a power of attorney.
“It can be difficult to have conversations about finances and preparing for the future, and financial advisers have a crucial role to play.
“Whether it’s helping explain the practical benefits of setting up a power of attorney, outlining potential difficulties that may be avoided further down the line, or referring them to an estate planner or solicitor who can help with an application for power of attorney, clients value guidance they can trust.”