Monthly Archives: September 2015

Mortgage brokers with buy-to-let clients who intend to use their property as part of their pension plan are being urged to recommend they take out a Lasting Power Attorney (LPA) before retirement age.

A Lasting Power of Attorney allows an individual to appoint a third party, known as the attorney, to make financial, property, health and welfare decisions if they are no longer capable of doing so.

Buy-to-let property owners should be using a property and financial LPA even if they use an agent to manage their portfolio and do not need to regularly review their finances, cautioned Moore Blatch solicitors. The firm said that a significant number of landlords would become unable to manage some or all of their financial affairs at a point during their retirement due to physical or mental ill health.

Moore Blatch said that approximately 1m LPAs have been taken out in England and Wales since 2012, which it said was a ‘tiny’ number considering that there were around 1.5m people aged over 85 and around 5m aged over 75.

The public’s reluctance to use LPAs stems from a lack of awareness of the protection available, a failure to accept an LPA might be needed and the perceived and actual complexity of putting one in place, said the firm.

Fiona Heald, head of the Court of Protection team at Moore Blatch, said: “While we would argue that most people should have the security of a Lasting Power of Attorney in place, we would expect virtually everyone who has chosen to manage their retirement finances personally to have one. Without an LPA a third party would not legally be allowed to instruct an adviser on any changes to a property portfolio no matter how closely related.”

Heald said LPAs should be drafted by a solicitor as there can be very serious consequences should an LPA be completed in error. “..the forms can appear to be deceptively simple,” she added. “In most cases errors are not discovered until it is too late”

Bank base rateThe Bank of England has voted 8-1 to keep interest rates on hold at 0.5%

The bank also lowered its estimate for the UK’s economic growth in the third quarter of this year from 0.7% down to 0.6%.

For the second month, Ian McCafferty was the only one of its Monetary Policy Committee (MPC) members to vote for an increase in rates.

Policy makers also said that the risks from the slowing Chinese economy had increased since August.

In its summary, the committee said: “Developments since then have increased the risks to prospects in China, as well as to other emerging economies.”

It added: “Global developments do not as yet appear sufficient to alter materially the central outlook described in the August Report, but the greater downside risks to the global environment merit close monitoring for any impact on domestic economic activity.”

It said that the reason for reducing its UK growth forecast had been the latest run of poor manufacturing and industrial production figures.