Almost 950,000 people in the UK are living with dementia, according to the NHS, and while many people remain financially independent in the early stages of the condition, it can progress to affect memory, judgment and decision-making.
If you have recently been diagnosed, taking action sooner rather than later can make a crucial difference to your future – and make things much easier for your loved ones. Some financial and legal arrangements can only be put in place while you still have mental capacity.
Here, Telegraph Money explains the practical steps you can take after a dementia diagnosis to safeguard your finances and maintain control for as long as possible.
Write or update your will
More than half (53pc) of adults aged 50 to 64 do not have a will, according to the Money and Pensions Service. If you’re one of them, it’s important to arrange one while you still have full capacity to ensure you have a say on what happens to your money, property and possessions after you die.
Megan Rimmer, of Quilter Cheviot, said: “A will is the simplest way to prevent financial disorder later in life, yet too many people only consider it once capacity is already slipping.”
Even if you already have a will, it’s sensible to take a diagnosis as an opportunity to review it and make any necessary amendments before your condition worsens.
Ms Rimmer added: “If dementia is even a remote concern, keeping your will current becomes essential. Once capacity is in doubt, families cannot update arrangements, which leaves estates vulnerable to disputes and forces outcomes that may not reflect your wishes.
“Reviewing it early locks in clarity and avoids relying on emergency measures when decision-making is already compromised.”
Set up a lasting power of attorney (LPA)
A lasting power of attorney (LPA) is a legal document that allows you to nominate someone you trust to manage your affairs and make decisions on your behalf when you no longer have capacity to do this yourself.
There are two different types of LPA. A property and finance LPA covers decisions regarding money, property and financial assets, while a health and welfare LPA covers decisions around your personal welfare and medical treatment.
Whether you can set up an LPA after a dementia diagnosis depends on your current mental capacity, according to Donna Bothamley, of Blythe Liggins Solicitors.
She said: “If there has already been a diagnosis of dementia, it is normal practice to obtain a capacity report to assess the level of understanding, whether the person still has the capacity to understand the document, and to appoint an attorney.
“A diagnosis does not automatically prevent you from being able to make an LPA. In the event that the person no longer has capacity, a Court of Protection application may be required. In this instance, the court will appoint a deputy who is able to manage the affairs of a person who is no longer able to manage them directly themselves.”
Setting up an LPA while you still have capacity ensures your financial and healthcare decisions are handled according to your wishes, without needing court intervention later.
Plan how future care costs could be covered
Care costs can rise quickly and catch families out if no early preparations have been made. In England, you must pay the full cost of your care home fees if your savings, capital or property are worth more than £23,250 if you do not qualify for NHS continuing health care (CHC) funding.
Michelle Holgate, of wealth manager RBC Brewin Dolphin, said: “Understanding how you’ll fund potential long-term care allows you to build sufficient resources strategically.
“You might consider leveraging savings and investments to create a dedicated care fund or consider care cost plans offered by financial institutions. Each has distinct advantages depending on your circumstances, timeline and family goals.”
It’s often worth seeking financial advice to help you plan for care costs. Doing this early on can help ensure you have some control over the type of care you receive.
Simplify your bank accounts
Multiple bank accounts and credit cards can become increasingly difficult to juggle as your memory starts to decline. Going through all your accounts now, potentially with a family member, can help you work out which ones can be closed.
Laura Davies, of The Good Care Group, said: “Fewer accounts, fewer cards and fewer direct debits mean fewer opportunities for missed payments, confusion, or fraud.
“A good starting point is one main current account for bills, one spending account with a modest balance, and a clear list of all accounts, pensions, insurers and key contacts.”
Keep this list in a folder and store it somewhere safe, informing a trusted family member of its location. You may want to have a digital backup, too.
Automate finances
Automating payments for household bills can take the pressure off if you struggle to keep on top of regular payments. This should be easy enough to set up through online banking or by speaking to your bank.
Thomas Gibbons, of Money Wellness, a debt advice and financial support firm, said: “Setting up direct debits or standing orders for regular bills like energy, council tax and insurance means payments are made on time.
“This is important because missed payments can lead to late fees, interest charges or even service disconnection.”
If it’s not possible to pay some bills by direct debit or standing order, find out if you can pay them using online or telephone banking services. Make a note in your diary for when they are due.
Set up a third-party mandate
In the early stages of your diagnosis, you could consider putting a third-party mandate in place to allow someone you trust to access your bank accounts and take care of everyday transactions.
However, Ms Rimmer warned that the third-party mandate ends the moment capacity becomes uncertain.
She said: “If the intention is to prepare for dementia, relying on a mandate alone is a false sense of security and it’s far better to use an LPA. A third-party mandate cannot help with broader financial decisions, and it offers no protection once the person can no longer make choices for themselves.”
Contact your bank and explore support services
When organising your finances, it’s worth contacting your bank to see what support services it offers.
Ms Rimmer said: “Banks have become more responsive to the needs of vulnerable customers, but that support can only be deployed if people engage early. Notifying your bank of concerns around capacity allows them to monitor unusual activity, simplify communication and put protective measures in place.”
Barclays, for example, allows you to add another cardholder to your debit card or select an “account supervisor” who can see your balance and set card controls.
Other banks offer more practical support. Nationwide has partnered with Admiral Nurses to run dementia clinics at its branches across the UK, and you don’t need to be a Nationwide member to attend.
These 45-minute appointments give you the opportunity to discuss your diagnosis and symptoms, understand how to choose a home or residential care and receive emotional support.
Check available resources and benefits
Additional resources and services are available from the Department of Work and Pensions, local councils and adult social services to support families affected by dementia, according to Ms Bothamley.
She said: “Additional benefits can be applied for by the dementia sufferer to enable them to pay for additional care at home if required, such as Attendance Allowance (AA) or Personal Independence Payment (PIP). Financial support can also be provided to a carer if they qualify for Carer’s Allowance.”