Readers who have tried to set up a lasting powers of attorney for themselves or a relative may find that certain banks have very limited capacity when it comes to dealing with the paperwork.
As the population ages, the need to get your LPA sorted becomes even more pressing. By the year 2030, it is estimated that more than 1mn people in the UK will be living with dementia — getting on for one in 10 people over the age of 65. As it becomes more likely that attorneys will have to take over everyday financial tasks, you might think that UK banks would be ready for this. Pah!
Even if you have prepared for the worst, jumped through the hoops and obtained the necessary paperwork, your attorneys could find that when the time comes and they try to register or activate their powers, banks merely add to the trauma.
“An absolute nightmare of obstruction and bureaucracy,” was how one attorney described the process in a survey this week from Which?, the consumer group. It makes for interesting — if worrying — reading.
Once the Office of the Public Guardian (OPG) grants approval, the powers of attorney document needs to be registered with every financial firm the donor (the person the attorneys are acting for) has an account with. Yet each bank has a different process for registering. Some will let you do so fairly painlessly online; others demand forms are posted and some require attorneys to attend an in-branch appointment — something that’s becoming much harder with dwindling numbers of bank branches and reduced opening hours.
The consumer champion surveyed 1,530 attorneys, and one in three said they found the registration process “somewhat” or “very difficult”. What’s more, the level of service — or lack of it — varied drastically from bank to bank.
Once banks had received documents, the timeframe for registering them varied from a couple of minutes (Starling Bank) to 15 working days with some major high street banks. One in four respondents said that registering the POA took much longer than expected. In practice, this could leave attorneys having to pay bills and fund other expenses out of their own pockets.
Plus, if the donor has lots of different bank accounts, waiting for paper copies of your POA documents to be processed and returned compounds the delays (Which? recommends obtaining several certified copies for this reason).
Coventry Building Society, Nationwide and Yorkshire Building Society came top for ease and speed of registering. At the other end of the table, the Co-operative Bank came bottom, closely followed by the Post Office. Several large high street banks also scored poorly, particularly if in-branch appointments were needed.
Lloyds, which has closed 721 branches since 2015, was singled out for criticism by one Which? member. “It repeatedly requested I go in with ID during the pandemic, at one point asking my dying end-of-life mother to go into the branch,” they said.
Another survey respondent found it “impossible” to deal with banks despite having worked in the financial industry for 40 years. “My parents are on the other side of the country, my father is in a care home and the local bank branch has closed,” they said. “The bank wants me to make a 200-mile round trip to the nearest branch to sign the relevant papers.”
Barclays, which has closed 1,444 branches since 2015, was also criticised for this. Both banks told Which? they do offer the option to register documents online. However, being told the correct information — that the online option exists and where to find it — relies on being served by a staff member who knows what they’re doing. Across all banks, one in seven respondents reported a lack of knowledge among the staff about the process.
If you’ve acted as an attorney, then you’ll know it can be an all-consuming task. Solicitors often recommend that two attorneys act “jointly and severally” so the burden can be shared. However, 67-year-old Anne Bell from Shipley, West Yorkshire, found this added to the complications.
Anne and her sister attempted to register powers of attorney for their mother, a customer of the Co-operative Bank. While Anne was allowed access to online banking, the bank’s system could only have one registered postal address on the account. So all correspondence, including bank cards and Pin numbers, was posted to her sister 300 miles away, although she wasn’t permitted to use online banking.
When Anne paid the first invoice from her mother’s care home, it triggered a fraud check. Anne phoned the number supplied, and an automated message asked if she was the account holder. “I said no, and the line was just cut off,” she told me. When she finally managed to contact the fraud team, they would only speak to her sister (thank goodness it wasn’t an actual fraud attempt).
“The banks need to stand in their customers’ shoes and think about it from our perspective,” she says. “This was such a stressful time. We were dealing with mum going into a care home, having to sell her house and clear the contents, so having these difficulties on top really did not help.”
Co-operative Bank said it was “disappointed” to see the results of the survey but had made “positive changes” since 2020 including enabling “certain documents” to be uploaded online, with further improvements to come.
However, Anne had a totally different experience when — still acting as attorney — she opened an account for her mother with the Coventry Building Society. “They were the best, and had a dedicated team for dealing with powers of attorney customers,” she says (other banks also have specialist bereavement teams, which is something to be encouraged).
Yet some Which? members found it impossible to open new accounts if their elderly relatives did not have a valid passport, driving licence or utility bills in their own name. Yet if you’re in a care home with dementia, the likelihood of having any of these things is very low. One respondent said these restrictions meant he was unable to obtain market-leading savings rates for his 91-year old mother.
These trying experiences may well accord with your own. If so, please take a minute to comment online or email us at money@ft.com as I intend to lobby the Financial Conduct Authority to use its new Consumer Duty to force banks and other financial institutions to up their game.
One of its tenets is that “vulnerable” customers should be treated fairly. I’d argue there is a double vulnerability here — the customer who has lost capacity, and the hard-pressed relative or friend trying to manage their financial affairs while dealing with the enormity of their loved one’s worsening health.
Yes, there is a need to guard against fraud and financial exploitation. But as banks cut costs by closing branches, they must invest in better systems and staff training to serve the changing needs of their customers, many of whom will have loyally banked with them for decades.
If you are in the process of setting up a financial powers of attorney, maybe the final bit of admin should be switching your main bank account to one of the highest scoring institutions in the table above. Unless the regulator goes on the offensive, I fear this may be the only way the banks will listen.
Claer Barrett is the FT’s consumer editor and author of the FT’s Sort Your Financial Life Out newsletter series; claer.barrett@ft.com; Instagram @ClaerB.
