Families urged to consider the unexpected financial risks that come with the disease


Families and friends who have a loved one living with dementia are being urged to consider the unexpected financial risks that can come with the disease.

With the isolation of lockdown causing a decline in 82 per cent of dementia sufferers, according to The Alzheimer’s Society, investment platform, Hargreaves Lansdown, has pinpointed seven financial issues dementia sufferers can fall foul of.

Paying bills multiple times, falling victims to scams and spending unnecessarily are among the financial risks associated with dementia.

According to the Alzheimer’s Society, lockdown caused a decline in 82 per cent of dementia sufferers, as a result of seeing fewer visitors.

According to the Alzheimer’s Society, lockdown caused a decline in 82 per cent of dementia sufferers, as a result of seeing fewer visitors.

There are estimated to be around 850,000 people living with dementia in the UK, according to The Alzheimer’s Society and it estimates 15 per cent of sufferers have been victims of financial abuse. 

‘If a family member is diagnosed with dementia, often the most obvious financial concern you’ll have is over how much care they’ll need, and what it will cost,’ said Sarah Coles, personal finance analyst at Hargreaves Lansdown.

‘However, dementia can throw up all sorts of far less well-known financial problems, from sufferers believing someone is stealing from them, to repeatedly paying the same bills, and even financial abuse.

‘We need to understand the risks to prevent our loved ones falling foul of them.’

For those diagnosed with dementia it is vital to sit down and discuss future financial arrangements with their closest relatives or friends.

‘Do it as soon as possible rather than constantly putting it off,’ said Caroline Abrahams, charity director at Age UK.

‘These kinds of conversations aren’t always easy, but they can make so much difference to you and everyone around you later on.

‘The truth is that you don’t want to leave it until a point is reached at which there may be questions about your capacity to make informed decisions about important financial matters, so that’s why it makes sense to get on with it as soon as you feel able to do so.’

Do you have a lasting power of attorney? 

The prevalence of dementia is one of the key reasons why it is vital for people to have a lasting power of attorney in place.

READ  Asia-Pacific shares lower with China and Japan markets closed for holidays

A lasting power of attorney is a legal document that enables them to appoint someone they trust to make decisions on their behalf were they to lose the mental capacity to do so.

A lasting power of attorney is vital in protecting someone’s affairs whilst they are still alive.

It can be beneficial to set up two – one for health decisions and one for finances, but it is important not to leave it too late and act to get one sorted just in case, as soon as possible.

If someone does not have a lasting power of attorney in place and dementia means they lack the mental capacity to deal with their own affairs, someone may be chosen to deputise, and a court will decide the limit of their powers.

This is likely to cost more, due to the court process and annual fees involved. 

 Sarah Coles, personal finance analyst at Hargreaves Lansdown, has the following advice on the financial risks associated with dementia. She writes:

1) Stealing accusations

It’s easy for sufferers to forget where they left their wallet, forget they have spent money, and worry they’ve lost it or that it has been stolen from them.

If families aren’t aware of this, it can lead to distrust and disagreements.

The best protection is to be aware of this, and why it happens, but you can take steps to minimise the risk too.

By having a legal power of attorney, you can withdraw the same amount of money each week and they can take a small sum out with them each day.

It’s worth them keeping a cash book, where they note what they spend as that will make it easier to keep track of where their money has gone.

At home, they should have a ‘safe place’ where their wallet is kept, where they can easily see it, so they can reassure themselves regularly that nothing has been stolen.

READ  Trusts could boost your portfolio: Back Buffett and The Beatles

2) Paying bills multiple times – or not at all

It can be difficult to remember which bills have been paid, so they may pay more than once or miss payments altogether.

It can make life much easier if you can help them sort out direct debits and automate payments for their bills.

Again, it helps to have a lasting power of attorney – although you can still do this alongside them without one in place.

3) Buying things they don’t need

Dementia sufferers might take a fancy to something unexpected, or repeatedly buy the same things, so it’s a good idea to monitor their account for spending.

If you don't have a lasting power of attorney, ask them to set up a third-party mandate, which means you can keep an eye on their accounts.

If you don’t have a lasting power of attorney, ask them to set up a third-party mandate, which means you can keep an eye on their accounts.

If you don’t have a lasting power of attorney, ask them to set up a third-party mandate, which means you can keep an eye on their accounts.

Some businesses let you link accounts – which has a very similar effect.

If you suspect this is going to be a problem, and you have been given a lasting power of attorney, you can cancel their debt facilities too, so if they do overspend, there’s a limit as to how much damage they can do.

4) Telling people their PIN

A sufferer may not want to admit they cannot remember their PIN.

If they have trouble remembering it, they may ask someone to write it down for them and may end up sharing it either deliberately or accidentally.

Talk to your bank and arrange for them to have a card that lets them spend with their signature

5) Falling victim to scams

Sufferers find it difficult to know who to trust, so they can fall victim to scammers.

You can make it harder for scammers to reach them, with a call blocker for their phone, and by signing up to the telephone preference service and the mailing preference service, to cut down junk mail and nuisance calls.

READ  Valuations are reasonable to cheap for small-cap stocks: Janakiraman R, Franklin Templeton

But you won’t be able to keep everyone out, so if you have a lasting power of attorney, keep an eye on their account, and check their post when you visit.

You’re looking for unopened bills that they can’t afford, or an increase in scam letters or junk mail – which can indicate they have responded to a scammer.

6) Nullifying their will

Dementia sufferers may have difficulties understanding relationships: getting remarried may nullify any will.

Dementia sufferers may have difficulties understanding relationships: getting remarried may nullify any will.

Sometimes people with dementia can decide to get married, and while this may be the celebration of a long-term relationship, in some cases they may have difficulties understanding relationships and propose to other people in their lives.

The cognitive function required for marriage is lower than that required in order to draw up a will.

It means getting married may nullify any will, and because they can’t draw up another, it means they will die intestate and their new spouse will inherit the first chunk of the estate.

If they have the cognitive function to marry, you will need to respect their wishes.

But if you are worried that they don’t, you should talk to their GP as a first step.

7) Being a victim of financial abuse

All of these things means someone who is close to the sufferer may be able to take advantage of them, and an estimated 15 per cent of people with dementia have been victims of financial abuse.

You can protect them against this with a lasting power of attorney and keeping a close eye on their finances.

You will also be alerted to problems if they start showing fear or anxiety when it comes to money.

Some links in this article may be affiliate links. If you click on them we may earn a small commission. That helps us fund This Is Money, and keep it free to use. We do not write articles to promote products. We do not allow any commercial relationship to affect our editorial independence.



READ SOURCE

LEAVE A REPLY

Please enter your comment!
Please enter your name here