5 meaningful ways you can help someone with dementia look after their finances

78 million people could be living with dementia by 2030.

There are lots of different types of dementia, but the most common symptoms include:

• Memory loss
• Confusion
• Changes in behaviour
• Difficulty understanding others and articulating yourself.

Such symptoms might mean that someone living with dementia needs a little bit more time to make decisions, or support to help them understand the implications of a decision.

Alongside its health implications, dementia can pose a significant challenge when it comes to managing money.

Indeed, research published by the National Institute on Aging shows that those with dementia are more likely to have had a lower credit score and to have missed credit card payments up to six years before their diagnosis than those who don’t develop dementia.

Read on to discover five ways you can help someone with dementia look after their finances.

1. Help them manage their regular expenses

Someone with dementia may struggle to manage their everyday expenses alone.

There are a few ways you could help to make life a little easier while they’re still capable of living relatively independently, including:

• Arrange a weekly grocery delivery with a direct debit, ensuring they have all the essentials delivered at a regular time. This helpfully also removes the need for them to remember what they need to buy or how to get to the right shop.
• Manage their subscriptions and household bills by setting up standing orders or direct debits for payments like utility bill, phone bills, or TV subscriptions. It may also be helpful to check that any existing payments and subscriptions could be cancelled if they’re no longer used.
• Notify their bank of their condition and explore alternative authorisation methods, such as a chip and signature card, which could be particularly useful for people who can’t remember their PIN.
• Consider setting up a third-party mandate with the bank, allowing you to manage everyday transactions on their behalf, or consider opening a joint bank account to give you both access to their finances.

These suggestions are all relatively easy to address and could make a significant difference to the day-to-day life of someone with dementia, potentially saving them time, upsetting distress, and money.

2. Create an “in case of emergency” folder

An “in case of emergency” or ICE folder means all the important information is held in one safe place.

A well-organised ICE document can give you and your loved one peace of mind that everything is easy to find in the event of a problem, or when someone else has to step in and help manage things.

It might include details such as:

• Insurance policies
• Care instructions for pets
• Any funeral plans that have been made
• Any current accounts, savings, and investments
• Location of key documents including passport, birth certificate, will, and property deeds
• Contact details for doctor, accountant, financial planner, solicitor, or other professionals
• Details about utility companies, subscriptions, and other accounts that may need to be transferred.

Your ICE folder should be kept somewhere secure – a fireproof safe or password-protected file – and always be careful about including any passwords or PINs.

3. Think ahead and encourage them to register a Power of Attorney

Dementia is a progressive condition; it doesn’t necessarily mean that you won’t be capable of managing your own money.

In the early stages, many people may still be able to make decisions with some help from a relative or a friend.

Sadly, over time, this is likely to change. Most people will likely reach a stage where they can no longer make decisions on their own.

Registering a Power of Attorney allows you to appoint one or more people to make decisions on your behalf or, in the case of financial matters, to help you make decisions.

There are two types:

• Property and financial affairs LPA – grants the power and authority to make decisions about your property and money on your behalf. Not only does this include managing your bank accounts and paying any bills but also collecting your pension or benefits and buying and selling property. You can write one ahead of time and choose when it will come into effect.
• Health and welfare LPA – attorney(s) will be empowered to make decisions about your personal welfare, life-sustaining treatment options and day-to-day routine healthcare on your behalf. They can also deal with all social services and medical staff.

Each of these must be written when the individual has appropriate mental capacity.

While a dementia diagnosis doesn’t automatically mean you’re not permitted to create these documents, you do need to meet a set of criteria to be able to do so.

4. Create a plan to cover costs of later-life care

During the later stages of dementia, your loved one may require specialist care. Depending on the level of support needed, this can turn out to be costly.

According to the UK Alzheimer’s Society, someone with dementia spends an average of around £100,000 on their care over their lifetime.

A financial planner can help you plan ahead and prepare for the potential costs of care your loved one may need later on.

They’ll assess the current financial situation, explore different care funding options, and build a plan that ensures your loved one will have the necessary resources in place should they need more support in the future.

They can also help you consider options like setting up trusts or making use of gifting strategies to reduce potential exposure to Inheritance Tax.

Again, having such conversations early on could help everyone concerned – both now and in the medium- to long-term future.

5. Speak to a financial planner

A financial planner can work with you to manage finances that someone else has entrusted to you.

However, while this article has focussed on looking after someone else’s needs, caring for someone living with dementia could also affect your own finances.

The NHS estimates that around 540,000 people in England are caring for a relative with dementia. Of these, 66,000 people have had to reduce their working hours and 50,000 people have left work altogether because of their caring responsibilities.

If this happened to you, it could affect your income and limit your ability to hit your long-term financial goals.

As such, a financial planner can also help you to mitigate the impact of caring responsibilities on your own financial wellbeing.

Get in touch

To find out more about how best to help your loved ones manage their finances, please get in touch.

Email enquiries@alexanderpeter.com or give us a call on +44 1689 493455.

Please note

This article is for general information only and does not constitute advice. The information is aimed at retail clients only.

All information is correct at the time of writing and is subject to change in the future.

The Financial Conduct Authority does not regulate estate planning or Lasting Powers of Attorney.