Lasting Powers of Attorney (LPAs) have become a central part of financial life in the UK. What was once seen as a legal safeguard for later life is now a mainstream tool, used by millions to ensure that trusted individuals can step in and support financial decision-making when needed.

But while the legal framework has evolved, the financial systems supporting it have not.

Our latest white paper, “The Financial Services Gap for Powers of Attorney,” explores a growing disconnect between how LPAs are used in practice and how financial services are designed to support them.

A system built on the wrong assumption

At the heart of the issue is a simple but critical flaw:

Financial control is still treated as binary.

You either:

• Manage everything yourself
• Or hand over full control to an attorney

In reality, financial capability doesn’t work like this.

People may:

• Experience temporary illness or recovery
• Live with fluctuating conditions
• Need support in some areas, but not others

Capacity can change over time. Support needs can increase and decrease. Independence can coexist with assistance.

Yet most financial systems cannot reflect this nuance.

When systems don’t fit, people work around them

When formal structures feel too rigid or restrictive, people don’t stop needing support — they simply find other ways to get it.

This often leads to informal and unsafe workarounds, such as:

• Sharing PIN numbers
• Allowing others to use bank cards
• Passing on login details

These behaviours are not rare. They are widespread.

They also remove key protections built into the financial system, increasing exposure to fraud, financial abuse, and loss of control.

In many cases, these risks are not created by individuals — they are created by systems that don’t offer a workable alternative.

The human impact: independence vs protection

Financial independence is closely tied to dignity, autonomy, and confidence.

For many people, the ability to:

• Pay for everyday items
• Manage spending
• Retain visibility of their finances

is fundamental to maintaining a sense of control over their lives.

However, when systems only allow full delegation, that independence can be lost entirely.

Our white paper highlights real-world examples where families are forced into difficult trade-offs:

• Protect someone financially, but remove their access
• Or maintain independence, but accept higher risk

This is not a technology limitation. It is a design limitation.

A growing problem at scale

The urgency of this issue is increasing.

LPAs are growing rapidly across the UK, driven by:

• An ageing population
• Increased awareness of financial vulnerability
• Greater emphasis on future planning

At the same time, the operational experience remains fragmented:

• Attorneys must register separately with each bank
• Processes vary widely between providers
• Digital access is inconsistent
• Opening or managing accounts can be complex and slow

What may once have been manageable at low volume is now becoming unsustainable at scale.

The missing middle

What’s clearly absent in today’s system is a middle ground.

A modern approach to LPAs should allow for:

• Graduated levels of access
• Adjustable permissions
• Real-time visibility and oversight
• Shared control where appropriate

For example:

• A donor could retain day-to-day spending ability
• While an attorney monitors transactions
• With additional controls applied only when needed

This kind of model reflects how people actually live — not how systems assume they do.

Protection doesn’t have to mean loss of control

There is often an assumption that safeguarding requires restriction.

In reality, better-designed systems can enhance protection while preserving independence.

By embedding:

• Transparent audit trails
• Flexible permissions
• Adaptive controls

financial services can respond dynamically as needs change.

This creates a model where:

• Support increases when risk increases
• Independence returns when it’s appropriate

Rather than forcing a permanent shift to full control.

Time for financial services to catch up

The question is no longer whether LPAs will continue to grow — they will.

The real question is whether financial services will evolve alongside them.

To close this gap, the industry needs to move towards:

• More flexible system design
• Better integration of support mechanisms
• Consistent, scalable processes
• A deeper understanding of real-world user needs

This is not just about improving efficiency.

It’s about:

• Reducing risk
• Preventing financial abuse
• Supporting millions of people to manage their finances safely
• Preserving dignity and independence

A system designed for real life

LPAs represent a shift in how we think about financial control — not as something fixed, but as something that can be shared, supported, and adapted over time.

The systems around them need to reflect that.

Because ultimately, the goal isn’t just to enable access.

It’s to enable people to live with:

confidence, safety, and independence — on their own terms.

Read the full white paper: https://moneycarer.org.uk/practical-insight-into-improving-financial-management-under-an-lpa/

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Through a streamlined application process, a range of account types can be opened to suit different needs, including:

• Appointee Bank Accounts
• Court of Protection Deputy Bank Accounts
• Vulnerable Adult Personal Accounts
• Personal Injury Trust Accounts

Once a referral has been completed, login details are issued to access the Monika platform. After logging in, users can view dedicated sections tailored to the individual they support.

These sections provide access to key features such as viewing and downloading account statements, setting balance limits, securely storing and accessing documents, and submitting emergency payment requests.

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Our ground-breaking Fast Funds Access Service enables deputies and attorneys to instruct us to access and transfer funds from your client’s personal current accounts up to £250,000 in a single direct debit transaction.

This service can be used to access funds in current accounts in the UK and Europe if the accounts have a direct debit facility. The funds are deposited into the deputy bank account we will open for you within 7 days.

This will enable you to have quick access to your clients funds without waiting months for the client’s high street bank to close the account or give you access to manage it.

This is, of course, in P’s best interest.

The authority for us to access the funds on your instruction as the deputy is via our tailored corporate partnership with GoCardless and their regulated status with the Financial Conduct Authority under the Payment Services Regulations (PSR) 2017 as a High-Value Transaction (HVT).

Upon receipt of the relevant certified documents (deputyship court order, and the deputy’s ID documents) we are able to set up a single, high-value direct debit of no more than £250,000 via our integrated API.

This simple but important service enables the deputy or attorney to pay care bills and professional and other fees without the long delays that can often put clients’ care arrangements at risk.

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Utilising state of the art Azure ™ Kubernetes Service and Cosmos DB ™ with Microsoft .NET ™ technology, Monika is a fully cloud native solution. The service is scalable to meet the demands of our fast-growing client list. The service is protected by Fastly.com ™ Web Application Firewall, Microsoft Defender for Cloud ™ and Azure Sentinel ™.

The Monika platform is separately audited by DataGuard ™ to ensure compliance with all privacy and data protection requirements. Further to this The Money Carer Foundation is currently preparing for full ISO 27001 certification as evidence of our commitment to the highest levels of quality service.

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All direct debits and standing orders are transferred automatically, giving you full visibility and control from within the platform.

Upon a successful switch an automatic payment redirection put in place. This ensures any payments sent to the old account are instantly forwarded to the new Monika account. This gives organisations like the DWP time to update their records without disrupting your client’s income.

If a client has multiple bank accounts across different providers, Monika can seamlessly sweep them all into one centralised client account.

This feature delivers significant time and cost savings for COP teams and Deputies. There’s no need to chase banks for Court Order or LPA acknowledgements, Monika handles the heavy lifting.

Accessing a client’s account is as simple as raising a current account switch request. In many cases, you won’t need to contact the old bank at all.

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Firstly, we will open a free Personal Injury Trust bank account for the trustees. Please provide us with a copy of the Trust Deed, the relevant identification details of each trustee and the beneficiary of the trust. Our banking partner, Zempler Bank, will then undertake the necessary KYC (Know Your Customer) checks using the information you have provided.

Once we have received the confirmation from Zempler Bank that all the documentation is in order, we can open the trustee managed bank account in the name of the beneficiary within a matter of minutes. If there are any queries that arise from the documentation you provide, our banking team will liaise with you directly to obtain any additional information Zempler Bank may require in order to proceed with the opening of the account on the Monika platform.

Once we have opened the personal injury trust account, you will be able to transfer the money held in the old trust account into the new trust bank account opened on the Monika platform so that the trustee can then manage the funds more easily using the unique features and functionalities available within Monika.

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If you are a professional deputy and wish to use the Monika banking platform. In that case, we have simplified transferring your deputyship accounts using our unique access to the Current Account Switch Service (CASS) In fact, we have engineered the ability to bulk transfer current accounts so as to make the process as hassle free as possible.

As with standard current account switches, all inbound payments made to the old deputy accounts will be automatically redirected to the new deputy accounts opened on the Monika platform. Similarly, any existing direct debits and standing orders set up on the old account will be automatically ported to the new account, with the old account closed and the entire balance transferred to the new account. 

All this happens within seven working days and is completely free of charge.

To discuss arranging for a bulk transfer of deputyship bank accounts, just get in touch and our friendly banking team will be happy to discuss the process and your requirements.

Read an article about how Pay.UK and Money Carer have worked together to develop the Current Account Switch Service to promote financial inclusion for vulnerable clients.

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Typical Costs

1. Basic Setup Costs
   • For a straightforward Bare Trust (the simplest type of personal injury trust), the setup cost is typically between £300 and £600.
   • For more complex trusts like Discretionary Trusts, costs can range from £1,000 to £2,500 due to the additional legal and tax considerations.
2. Professional Fees
   • Solicitors’ fees: Solicitors usually charge a fixed fee for drafting the trust deed and advising on the setup. This is often included in the setup cost mentioned above.
   • Financial advice fees: If you seek advice on managing or investing the compensation, independent financial advisors may charge additional fees, either as a flat fee or a percentage of the investment.
3. Ongoing Administration Costs
   • If you appoint professional trustees (e.g., a solicitor or accountant), they may charge annual fees for managing the trust. This can range from £500 to £2,000+ per year, depending on the complexity of the trust and the level of involvement required.
   • DIY trusts (where family members or close friends act as trustees) generally have no ongoing professional fees but may still require occasional legal or accounting advice.
4. Additional Costs
   • Tax advice: For discretionary trusts, you may need advice on income tax, capital gains tax, or inheritance tax implications. A one-off consultation with a tax advisor could cost £200 to £500.
   • Bank account fees: Many trusts require a separate bank account, which may incur maintenance fees, especially for business or trustee accounts.

It is worth noting that setting up a Personal Injury Trust on the Monika Banking Platform is free of charge.

Cost Factors

• Type of Trust: Bare Trusts are simpler and less expensive than Discretionary Trusts, which require more detailed drafting and administration.
• Professional vs. Non-Professional Trustees: Using family or friends as trustees reduces costs but may lack expertise.
• Size of the Compensation: Larger settlements may require more complex trusts and professional advice, increasing costs.

How to Minimise Costs

• Shop around: Compare fees from different solicitors or trust providers.
• Use fixed-fee services: Many solicitors offer fixed-fee packages for personal injury trusts, avoiding unexpected costs.
• Consider your needs: If the trust is for straightforward purposes, a Bare Trust may suffice, reducing setup and administration costs.

Funding the Trust Setup

The cost of setting up the trust can often be paid from the compensation awarded, ensuring that it doesn’t require out-of-pocket expenses.

For an exact quote, it’s recommended to consult a solicitor experienced in personal injury trusts. They can assess your needs and provide a clear breakdown of the costs involved.

To open a personal injury trust bank account, simply contact us.

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1. Protection of Means-Tested Benefits

• Preserves eligibility: Compensation placed in a personal injury trust is disregarded when assessing eligibility for means-tested benefits such as Universal Credit, Income Support, or Housing Benefit.
• Mitigates financial impact: Without a trust, compensation could push you over the savings threshold, causing you to lose benefits.

2. Protection of Assets

• Ring-fenced funds: The trust ensures that the compensation is separate from your personal finances, reducing the risk of mismanagement or impulsive spending.
• Asset preservation: Helps protect the compensation from creditors, divorce settlements, or other claims.

3. Flexibility and Control

• Controlled access: Trustees (appointed by you) manage the funds, which can ensure that money is used for its intended purpose, such as healthcare, housing, or other necessities.
• Tax planning opportunities: Trusts can sometimes offer tax advantages, though this depends on specific circumstances.

4. Peace of Mind

• Professional oversight: Trustees can include professionals who provide financial advice, ensuring the money is invested and used wisely.
• Longevity of funds: Ensures that funds last over the long term, particularly for those with ongoing care or medical needs.

Disadvantages

1. Costs

• Set-up costs: Establishing the trust requires legal assistance, which can be expensive.
• Ongoing fees: Trustees, especially professional ones, may charge fees for managing the trust. There may also be costs for preparing annual accounts.

2. Administrative Burden

• Ongoing compliance: Trustees must comply with legal and regulatory requirements, which can involve paperwork and reporting.
• Time-consuming decisions: Trustees must collectively agree on how the funds are managed and spent, which can delay decisions.

3. Limited Access

• Restricted use of funds: The trust can only be used for specific purposes, as outlined in the trust deed. You’ll need trustee approval for withdrawals.
• Potential frustration: Some beneficiaries find it inconvenient not to have direct access to their compensation.

4. Tax Implications

• Tax liabilities: While many personal injury trusts have limited tax exposure, they may still incur tax on income or capital gains generated within the trust if they exceed certain thresholds.
• Inheritance Tax (IHT): Depending on the type of trust, there could be IHT implications every 10 years or when assets are distributed.

5. Trustee Challenges

• Trustee selection: Choosing suitable trustees can be difficult. Trustees need to act in your best interests and manage the trust responsibly.
• Trustee disagreements: Conflicts among trustees could lead to delays or legal disputes.

6. Potential Impact on Relationships

• Dependency on trustees: Relying on trustees for access to funds can strain personal relationships if friends or family members are appointed.

Who Should Consider a Personal Injury Trust?

• Individuals receiving a significant compensation payout and who rely on means-tested benefits.
• People who need long-term financial planning for ongoing care or medical expenses.
• Those seeking to safeguard their compensation from financial mismanagement or external claims.

Types of Personal Injury Trusts

• Bare Trusts: The beneficiary has direct entitlement to the funds, and income tax is paid at the beneficiary’s rate.
• Discretionary Trusts: Trustees decide how and when to distribute funds, offering more flexibility and protection but with more complex tax rules.
• Life Interest Trusts: The beneficiary has the right to income generated by the trust, while capital is preserved for others.

Key Takeaway: A personal injury trust can offer significant benefits in terms of financial protection and means-tested benefit preservation. However, it is important to weigh the costs, administrative responsibilities, and restrictions. Consulting with a solicitor or financial adviser is crucial to determine if a trust aligns with your circumstances.

If you would like to open a personal injury trust bank account on the Monika platform, simply contact us and our friendly banking team will be happy to assit you with this.

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