Dementia affects people in different ways, and lots of people live with this condition for years, with the ability to manage their money. However, there are many things to consider when you are managing finances for someone living with dementia. A common issue for families is identifying when a loved one is starting to struggle. We look at what you need to know, including arranging Lasting Powers of Attorney and the different allowances available.
Managing finances for a parent living with dementia
An early sign of an older parent potentially losing the ability to manage their finances could be forgetting their bank card PIN (personal identification number). This can be distressing for people, especially when they’re in a public place such as a supermarket and cannot pay for their shopping. They might also start forgetting how to get to and from the supermarket.
You could help them switch to online shopping and manage payments through supermarket apps. If they are beginning to struggle with household bill payments, you could also set up direct debits to ensure nothing important is forgotten.
In many cases, those living with dementia are able to manage simple, daily finances. However, if they need to make a complex decision on their mortgage, energy provider, or investments, they may need more support. Difficulties arise when carers are not legally allowed to influence someone’s financial decisions because they do not have Lasting Powers of Attorney in place.
What does a Lasting Power of Attorney allow someone to do?
It’s important to arrange Lasting Powers of Attorney before a parent, partner, or another family member loses mental capacity. Once someone has been diagnosed with dementia, it’s often too late to put them in place. It’s also worth noting that you can lose capacity at any age due to other conditions, such as a stroke, heart attack or even an accident.
If you’re nominated as someone’s attorney, this gives you the legal right to manage their affairs when they no longer have mental capacity. Otherwise, the Court of Protection could decide on important life choices such as choosing a care home.
There are two types of Lasting Powers of Attorney:
- Health & Welfare – this allows the attorney to make decisions about someone’s daily routine, diet, healthcare, medical treatment, and where they live. As an example, you would be able to choose the type of care they receive and the choice of care home.
- Property & Financial Affairs – this allows the attorney to use, open and close someone’s bank accounts on their behalf. This Lasting Power of Attorney also enables the management of benefits, pensions, investments, and the sale or purchase of someone’s home.
Living with dementia – benefits and Council Tax reduction
Did you know that if you’re living with someone with dementia, you could be eligible for a 25% reduction in Council Tax? For those with a dementia diagnosis who live alone, they may be eligible for a 100% reduction.
There are also other types of benefits available for those living with dementia:
- Attendance Allowance – this pays out a weekly benefit for someone with an eligible condition or disability who needs help caring for themselves. There are currently two rates: Lower £73.90 and Higher £110.40. The amount you will receive will depend on the level of care or supervision needed.
- Carers Allowance – this pays out a weekly benefit if you care for someone at least 35 hours a week, who has an eligible condition or disability. The current rate is £83.30, and you don’t need to be related to the person you are caring for.
If you, your partner, or a family member could be entitled to the above benefits, there is advice available on the Gov.uk website. You can also find various forms of support through national and local dementia charities. For more information about dementia, see our blog, The financial and emotional toll of cognitive decline.
Trent Dementia – our nominated charity
Have you or your family been affected by dementia? Trent Dementia is our chosen charity for 2026. Based locally in Nottingham, this small charity continually works hard to improve the quality of life for those living with dementia. They also provide various resources on dementia to help people navigate this complex condition.
Over the year ahead, the Balance: Wealth Planning team will be taking part in a series of fundraising challenges. Whether you’re one of our clients or your family has been affected by dementia, why not help us raise funds for this very important local cause? Keep an eye on our chosen charity page for upcoming events.
Holistic financial planning, Nottingham and Derby
Living with dementia can be difficult for the person with the condition, as well as their surrounding family and friends. Therefore, the more you can do in advance to plan for the unexpected, the more capability you will have to manage someone’s financial affairs. It’s essential to arrange Lasting Powers of Attorney early on in life, so your family can make important decisions for loved ones.
At Balance: Wealth Planning, we can help you manage your finances and prepare for care costs in later life. Our financial planners will carry out a financial review and cash-flow planning exercise so you are prepared for any “what-if” moments. Using a holistic approach and tax-efficient planning, we’ll help you plan ahead so you have greater financial security.
For advice on managing finances with dementia, get in touch to speak to our financial planners.
Sources:
https://www.trentdementia.org.uk/
https://www.lastingpowerofattorney.service.gov.uk/guide#topic-the-2-types-of-lpa
https://www.gov.uk/attendance-allowance/eligibility
https://www.gov.uk/attendance-allowance/what-youll-get
https://www.gov.uk/carers-allowance
