Power of Attorney and Pensions: What Can You Do For Your Parents?

Many professionals in their 40s, 50s and early 60s find themselves in a new and unfamiliar role: helping ageing parents manage their finances.

Often this starts informally – attending meetings, making phone calls, or “keeping an eye on things”. Eventually, it can become more formal, with a Lasting Power of Attorney (LPA) put in place for Property and Financial Affairs.

What frequently comes as a surprise is how pensions fit into this picture.

Despite being one of the largest assets many older people hold, pensions are often the hardest for families to deal with once mental capacity is lost.

Why Pensions Don’t Behave Like Other Assets

A registered LPA allows an attorney to manage bank accounts, pay bills, and deal with investments. Many people reasonably assume this extends automatically to pensions.

In reality, pensions are different.

Most pensions are not owned directly by the individual. They sit within trust-based or contractual structures, with discretion retained by trustees or scheme administrators. An LPA does not override those rules.

Instead, it allows the attorney to act only where the pension scheme permits it.

What Attorneys Can Usually Do

Once an LPA is registered and accepted by a pension provider, attorneys are often able to: 

• Access information about the pension
• Communicate with the provider on the member’s behalf 
• Manage income already in payment  
• Update personal or bank details

Even these steps can involve delays, additional verification, and provider-specific processes.

What Attorneys Are Often Surprised They Cannot Do

The most difficult conversations arise when families discover that certain decisions cannot be made by an attorney, even with a valid LPA.

• Common restrictions include:
  Starting pension benefits that have not already been taken 
• Changing how benefits are drawn
• Making significant investment decisions within the pension 
• Taking lump sums where discretion applies

For families relying on pension income to fund care or living costs, this can be both confusing and distressing.

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The Real Risk: Loss Of Capacity Before Decisions Are Made

Many people delay accessing their pensions for perfectly sensible reasons: tax efficiency, continued employment, or simply not needing the income yet.

However, if mental capacity is lost before any benefits are crystallised or income is established, attorneys may find themselves unable to act at the point action is most needed.

From a family’s perspective, this can feel like having money locked away just out of reach.

Trust-Based Versus Contract-Based Pensions

Not all pensions behave in the same way.

Trust-based occupational schemes often involve trustee discretion and more formal governance. Contract-based personal pensions and SIPPs can be more flexible, but policies still vary widely between providers.

There is no single rule advisers or families can rely on. Each pension needs to be considered individually.

What Advisers Should Be Encouraging Clients To Do

For clients supporting elderly parents, early conversations make a material difference.

Helpful steps include: 

• Ensuring LPAs are in place and registered before capacity becomes an issue 
• Reviewing pension arrangements alongside other assets 
• Understanding provider-specific rules while the member still has capacity 
• Considering whether partial crystallisation or income setup is appropriate 
• Keeping expression of wish nominations up to date

These discussions are often easier when framed as contingency planning rather than crisis response.

Helping parents navigate pensions under a Power of Attorney is something many capable, intelligent professionals encounter for the first time with little warning.

Good financial planning does not stop with one generation. Increasingly, it requires understanding how decisions – or the absence of them – affect families as a whole.

Addressing Power of Attorney in the context of pensions is not about pessimism. It is about clarity, preparedness, and avoiding unnecessary difficulty at already challenging time.