Power of Attorney and Pensions UK: Accessing Retirement Income

Pensions are often a person's most significant source of income in later life — and later life is precisely when mental capacity is most likely to decline. If someone loses the ability to manage their own affairs, a Lasting Power of Attorney becomes essential for accessing and managing their pension income.

Without an LPA, pension payments can continue to arrive in an account that nobody can access. Bills mount up, care cannot be funded, and families are left in limbo. This guide explains exactly how an LPA works with every type of pension in the UK, and what practical steps attorneys need to take.

Why Pensions and LPAs Go Together

Consider this scenario: your father has a state pension, a workplace pension from his former employer, and a small private pension. He develops dementia and moves into a care home. Who pays the care home fees?

Without an LPA: Nobody has legal authority to redirect his pension income, change payment details, or communicate with pension providers on his behalf. The pensions keep paying into his account, but the account may be frozen. Meanwhile, care fees are mounting.

With an LPA: You, as his attorney, can contact each pension provider, register the LPA, manage payments, and ensure his income funds his care. The transition is smooth and legal.

This is why creating an LPA well before retirement — or certainly before any cognitive decline — is so critical.

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State Pension and LPA

The state pension is managed by the Department for Work and Pensions (DWP). Here is how an LPA interacts with the state pension:

Registering your LPA with the DWP:

Contact the Pension Service on 0800 731 0469

Explain that you hold an LPA and the donor has lost capacity

Send a certified copy of the registered LPA (not the original)

The DWP will update their records

What the attorney can do:

Change the bank account the pension is paid into
Manage correspondence with the DWP
Report changes in circumstances
Claim any additional benefits the donor is entitled to
Handle overpayments or underpayments

Important distinction — LPA vs DWP Appointeeship:

The DWP has its own system called an appointeeship, which allows someone to manage another person's benefits. However, an LPA is more powerful:

LPA	DWP Appointee

Covers	All financial affairs	DWP benefits only
Application	Created by the individual	Applied for through DWP
Scope	Banks, pensions, property, everything	State pension and benefits only
Cost	£74 with myLPA + £82 OPG fee	Free
Created by	The person themselves	A third party applies

If you have an LPA, you do not necessarily need a separate DWP appointeeship. The LPA covers state pension management. However, some attorneys apply for appointeeship as well for administrative convenience with the DWP.

Workplace Pensions and LPA

Workplace pensions (also called occupational pensions) are managed by individual pension schemes or insurance companies. The process varies by provider, but the general approach is the same.

Defined benefit (final salary) pensions:

Contact the pension scheme administrator
Send a certified copy of the registered LPA
The scheme will update their records and correspond with the attorney
The attorney can manage payment details and make elections (such as lump sum vs regular payments)

Defined contribution pensions:

Contact the pension provider (e.g. Aviva, Legal & General, Scottish Widows)
Register the LPA with the provider
The attorney can manage drawdown, change investment options, and adjust income levels
Some complex decisions may require financial advice

Key considerations for workplace pensions:

Each pension provider has its own LPA registration process
Some require original certified copies; others accept scanned copies
Processing times vary from days to weeks
The attorney should check if the pension is still in accumulation or is already being drawn

Private and Personal Pensions

Private pensions, including SIPPs (Self-Invested Personal Pensions) and personal pension plans, follow a similar process:

Registering the LPA:

Contact the pension provider

Complete their LPA registration form (most have one)

Provide a certified copy of the registered LPA

Wait for confirmation

What the attorney can do with a private pension:

Access pension statements and valuations
Change where pension income is paid
Make drawdown decisions
Switch investment funds
Take lump sums (within tax rules)
Manage tax-free cash withdrawals

SIPP-specific considerations: SIPPs often involve complex investment decisions. If the donor was actively managing their SIPP investments, the attorney inherits this responsibility. You may want to:

Simplify the investment portfolio
Take professional financial advice
Switch to lower-risk investments appropriate for income drawdown
Ensure regular income is being drawn to fund care

Pension Tax Considerations for Attorneys

Managing someone's pension as attorney comes with tax responsibilities:

Income tax: Pension income is taxable. The attorney must ensure tax is paid correctly. PAYE usually handles this automatically for regular pension payments, but lump sum withdrawals may require tax planning.

Tax-free lump sum: If the donor has not yet taken their 25% tax-free lump sum, the attorney can do so. This can be useful for funding immediate care costs.

Annual allowance: If the donor is still contributing to a pension (unusual but possible), annual allowance rules still apply.

Self-assessment: If the donor was completing self-assessment tax returns, the attorney takes over this responsibility. Notify HMRC of the LPA.

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Practical Steps for Pension Attorneys

If you become attorney for someone with pensions, here is a practical checklist:

Step 1: Identify all pensions

Check payslips, bank statements, and paperwork for pension payments
Contact previous employers
Use the government's Pension Tracing Service (free) to find lost pensions
Check for any frozen pensions from earlier in the donor's career

Step 2: Register the LPA with each provider

Each provider needs their own copy of the LPA
Use certified copies, not the original
Get a solicitor, commissioner for oaths, or the OPG to certify copies
Keep a record of which providers you have registered with

Step 3: Review the pension arrangements

How much income is being received?
Is the income appropriate for the donor's needs?
Are investments suitable given the donor's circumstances?
Could income be increased to fund care costs?

Step 4: Set up appropriate payments

Ensure pension income is directed to an appropriate account
Set up regular transfers to cover care costs if needed
Keep clear records of all pension income received and how it is spent

Step 5: Keep records

Document every decision you make regarding pensions
Keep copies of all correspondence with pension providers
Record why you made each decision (in the donor's best interests)
Be prepared to account for your actions if asked by the OPG

What About Pension Death Benefits?

While this article focuses on managing pensions during the donor's lifetime, it is worth noting:

Expression of wish forms: Most pensions allow the holder to nominate who receives death benefits. As attorney, you generally cannot change these nominations — they were the donor's personal wish. However, pension scheme trustees have discretion over who receives death benefits regardless.

Lump sum death benefits: These are paid at the pension scheme's discretion and are outside the estate for inheritance tax purposes.

Dependant's pensions: Many workplace pensions provide a spouse's or dependant's pension on death. The attorney should check what provisions exist.

If There Is No LPA: The DWP Appointee Route

If someone loses capacity without an LPA, the DWP appointee system is the only way to manage their state pension and benefits.

To become a DWP appointee:

Contact the DWP on 0800 731 0469

Complete form BF56

A DWP visiting officer may visit the claimant

The DWP will confirm the appointment

Limitations of appointeeship:

Only covers DWP benefits and state pension
Does not cover private or workplace pensions
Does not give authority over bank accounts or other finances
For everything else, you would need a Court of Protection Deputyship

The cost and hassle of a Deputyship application (£1,000 to £5,000 in legal fees, 4 to 12 months wait) makes the case for creating an LPA crystal clear. At just £74 with myLPA, it is one of the most worthwhile investments you will ever make.

Pension Scams: What Attorneys Should Watch For

As attorney managing someone's pension, be alert to pension scams:

Unsolicited contact offering pension reviews or free advice
Offers to release pension early (before age 55) — this is almost always a scam
Pressure to transfer to an overseas scheme or unusual investment
Guaranteed returns on pension investments — no legitimate scheme can guarantee returns

If in doubt, check the FCA register (fca.org.uk) and report suspected scams to Action Fraud.

Frequently Asked Questions

Can an attorney withdraw from someone's pension?

Yes. A Property and Financial Affairs attorney can manage all aspects of the donor's pension, including withdrawals, drawdown, and lump sum payments, provided they act in the donor's best interests.

Do I need to register the LPA with every pension provider separately?

Yes. Each pension provider needs their own certified copy of the LPA and has their own registration process. Contact each provider individually.

Can an attorney change pension investments?

Yes, but the attorney must act in the donor's best interests. For complex investment decisions, consider taking independent financial advice. This cost can be paid from the donor's funds.

What is the difference between an LPA and a DWP appointee?

An LPA covers all financial affairs including all pensions, bank accounts, and property. A DWP appointee can only manage state pension and DWP benefits. An LPA is much more comprehensive.

How long does it take to register an LPA with a pension provider?

Typically 1 to 4 weeks, though some providers are faster. Start the process as soon as the LPA is needed to avoid delays in accessing pension income.

Can an attorney claim benefits on behalf of the donor?

Yes. The attorney can claim Pension Credit, Attendance Allowance, and other benefits the donor is entitled to. This is an important responsibility — many people miss out on benefits they could claim.

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Protect Your Pension and Your Future

Do not leave your pension income at risk. A Lasting Power of Attorney ensures your chosen person can manage your pension and all your financial affairs if you ever lose capacity.

Create your LPA today with myLPA — from just £74, the cheapest service in the UK.

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Power of Attorney and Pensions UK: Accessing Retirement Income