Q: My father has just turned 70 and has started overspending, seemingly without a care for his retirement.
Dad was a manager at a software company and officially retired last year at age 69. Since then, he has started spending frivolously on things like meals out and weekend breaks away. He’s now bought a classic car that doesn’t even run. He plans to “do it up” but he’s never even had an interest in cars all his life!
I am concerned that he will not have enough to last his retirement, however, I also don’t want to stop him having fun now that he is free from the shackles of his career. Should I be worried about him?
A: It is a tricky one isn’t it, but I think the first question I’d ask myself is: How normal is it for dad to act like this?
It sounds like your father had a great job and worked hard. Was he cautious with money or did he tend to splurge? Was he typically a spender or a saver?
Starting there, might help you think whether or not you need to worry and of course, we can simply put it down to him having a little bit of fun following his recent retirement.
However, it could also signal something more serious.
Overspending can sometimes be an early sign of dementia – especially if it is a little out of character. This is because some forms of dementia affect judgment and impulse control, leading people to spend as if money is limitless and future needs don’t exist.
It’s particularly worrying when we consider that life expectancy in the UK is now approaching 85. Someone retiring at 69 like your father, may need their pension savings to last 20 years or more, potentially longer than they spent saving.
Whether or not there are concerns about capacity, it’s vital for everyone to take financial advice, involve family where appropriate and plan ahead. Encourage those you care about to get support, understand what their living arrangements are and what any income is from any pensions, for example, and consider how they might like to live a long – and hopefully healthy – retirement.
LPAs can help
It’s also wise to take legal steps, like making a will and setting up Lasting Powers of Attorney (LPAs) for both health and finance ensures any wishes are understood and respected. Attorneys can also offer support and step in if they suspect someone is being exploited. The key issue in these circumstances is whether the person who has made the LPA has mental capacity to manage their finances and make decisions on what they spend. There is an assumption of capacity unless proven otherwise on a time and decision specific basis. If someone has capacity, they can do what they want and make decisions that others may feel are unwise.
If your loved one is losing or has lost mental capacity and there are genuine concerns for their welfare – there MUST have a Welfare LPA in place, you cannot act without it, regardless of if you are a sibling, spouse or even a child or parent of the person you fear is losing capacity.
These measures are especially important in blended families, where expectations can differ, there are family tensions and conflict, and where the law’s default solution may not reflect what you would actually want.
Without proper planning, things can be devastating, both for the individual and their loved ones.
For more information and advice about the issues raised and including on Lasting Powers of Attorney, and wills, contact Downs Solicitors to see how we can help.
Contact Liz Dalgetty
