Power of attorney and pensions: how it works

A pension power of attorney lets a trusted person deal with someone else's pension. The paperwork depends on the nation, and each provider sets its own checks.

Looking after a parent's or partner's pension is easier when you know which document you hold and who needs to see it. With the paperwork sorted, an FCA-authorised adviser can discuss the pension itself with you, and this page's short form arranges that free phone call.

How does a pension power of attorney work?

In England and Wales the document you want is a property and financial affairs lasting power of attorney (LPA). GOV.UK says it lets an attorney make decisions about money and property, with "collecting benefits or a pension" among the examples. The person who made it is the donor; you are the attorney.

It "can be used as soon as it’s registered, with your permission". GOV.UK's guide for attorneys adds a second condition: that early start is possible only if the LPA itself allows it, and otherwise the attorney waits until the donor lacks capacity. The attorney has no powers before registration: "you cannot start acting until it is" registered.

A general (ordinary) power of attorney is different. Aviva says that type "will stop if the donor loses mental capacity", which is usually the moment a family needs the document. Being next of kin does not fill the gap either, since Standard Life points out that next of kin have no legal right to take over these decisions.

Which power of attorney applies in England, Wales, Scotland or Northern Ireland?

An LPA is "legally binding only in England and Wales", according to GOV.UK, which sends anyone who needs a power of attorney that works in Scotland or Northern Ireland to that nation's own process.

• Scotland. A financial one is a continuing power of attorney, and mygov.scot says it cannot take effect until it is registered with the Office of the Public Guardian there.
• Northern Ireland. An enduring power of attorney (EPA) carries on after capacity is lost. nidirect adds that registration with the High Court (Office of Care and Protection) is "not needed until your attorney believes you are no longer able to manage your finances".
• Older English and Welsh documents. Aviva says EPAs could be made up to 30 September 2007 and remain valid, but once the donor is becoming mentally incapable the EPA is suspended until it is registered with the Court of Protection.

Registration takes time. GOV.UK gives 8 to 10 weeks "if there are no mistakes in the application", and elsewhere says up to 16 weeks. The England and Wales fee is £92, unless a reduction or exemption applies. If the donor has property or ties in more than one nation, a solicitor can say which documents are needed.

How do you register a power of attorney with a pension provider?

The Office of the Public Guardian registers the LPA itself. The pension company then needs to see it so it can recognise you, and it keeps its own rules: Aviva says companies set their own requirements, though generally an attorney provides a certified copy of the document and proof of identity.

• Aviva asks for the certified copy, proof of the attorney's identity and the donor's policy numbers, sent together once, and says some policy types may have other requirements.
• Standard Life wants "the original Power of Attorney document or an original certified copy", and can check an LPA online if it was granted on or after 1 January 2016.

Those are two firms' own routes, not a rule for every provider. For the Teachers' Pension Scheme (teachers in Scotland have their own scheme, run by the SPPA) or another public-sector scheme, ask the scheme what it needs; an adviser can explain the usual steps at no cost if you ask on the call-back.

A third-party mandate can suit a donor who can still decide but wants help with calls. At Standard Life the person named "cannot make decisions for you", it lasts a year and it stops if the donor loses capacity. It is a stop-gap, not a power of attorney.

What can an attorney do with the donor's pension, and what must they not do?

The attorney acts for the donor, never for themselves. GOV.UK says they must act in the donor's best interests, help the donor decide where possible, follow any restrictions written into the LPA, keep the donor's money apart from their own unless they already share an account, and keep records. They must not use the position to benefit themselves or let others use the LPA. The statutory root is section 1 of the Mental Capacity Act 2005, under which a decision for someone lacking capacity "must be done, or made, in his best interests".

If there are several attorneys, the LPA sets whether they act alone or together. Where it says jointly, "all attorneys have to agree on the decision". The Office of the Public Guardian can also ask how the LPA is being used.

Starting a new pension is stricter. Aviva says an attorney "can only apply for a pension if the donor has lost mental or physical capacity", and where the attorney is not acting under a registered enduring power it may want evidence of incapacity from a doctor or a lawyer.

GOV.UK lists pensions and benefits, and property and investments, among the decisions a property and financial affairs attorney makes, within any restrictions the donor wrote into the LPA. Before taking benefits, moving a pot or changing a nomination, ask the provider in writing what it will accept from an attorney. Death benefits are in how pension death benefits work.

What if there is no lasting power of attorney for the pension?

Once the donor has lost capacity, a power of attorney can no longer be made. The fallback is a deputy appointed by the Court of Protection or, for State Pension, an appointee. GOV.UK says a property and financial affairs deputy can pay the person's bills and organise their pension, and sends an annual report to the Office of the Public Guardian. Where an LPA or EPA exists, the person does not usually need a deputy.

Benefits alone have a lighter route: you "do not need to be a deputy if you’re just looking after someone’s benefits", and can apply to be an appointee by contacting the Pension Service for State Pension. You are not the appointee until DWP confirms it, and the money has to be spent in the claimant's best interests.

In Scotland the equivalent is guardianship, and in Northern Ireland a controller; GOV.UK's deputy guide names both. A solicitor in the donor's nation can say which fits. Read how the State Pension works and how pensions are protected alongside, and how pension scams work if a stranger offers to "help" with a pension.

Practical questions from people acting for a relative

Can an attorney take money from the donor's pension for themselves?

No. An attorney must not "use your position to benefit yourself", and payments should be in the donor's best interests and recorded. GOV.UK adds that, unless the LPA says otherwise, gifts are limited to usual occasions such as birthdays and to charities the donor would not object to; anything else needs the Court of Protection, and misused money can have to be repaid.

Does an English LPA work in Scotland?

Not automatically: GOV.UK says an LPA is legally binding only in England and Wales. The Scottish financial document is a continuing power of attorney, which mygov.scot says must be registered with the Office of the Public Guardian in Scotland before it takes effect.

Do I need a solicitor to act as an attorney?

GOV.UK says "You do not need any legal experience to act as someone’s attorney". A solicitor is worth asking if the document has unusual restrictions, an old enduring power is involved, or more than one nation is in play.

Can I use a power of attorney for a Teachers' Pension or an Aviva pension?

Each provider and scheme sets its own checks. See advice on a teachers' pension, Aviva pension advice and Standard Life pension advice.

Where can I get free help sorting out a relative's pension?

Pension Wise and MoneyHelper are free; the free help guide and the Pension Wise explainer set out what each covers. An adviser can go through the donor's whole position by phone; type your number into this enquiry form and ask for the call-back.