Using an LPA to Manage Pensions

Written by James Tyrrell · Reviewed by Anthony Dalton · Last reviewed 16 March 2026

If you hold a registered Property and Financial Affairs LPA, you may need to step in and manage the donor’s pensions — from claiming the State Pension to adjusting drawdown plans. This guide covers what attorneys need to know.

Why Pension Management Matters Under an LPA

For many people in the UK, their pension is their primary source of income in later life — and often their largest financial asset. When the person who created the LPA (the "donor") loses mental capacity or simply needs help managing their affairs, the attorney appointed under a Property and Financial Affairs LPA can step in to handle pension-related matters on their behalf.

Without a registered LPA in place, pension providers and the DWP may refuse to discuss the donor's pension with anyone else — even close family members. This can leave families unable to access funds needed for day-to-day care costs, bills and living expenses.

Managing the State Pension

The State Pension is administered by the Department for Work and Pensions (DWP). As an attorney, you can contact the DWP's Pension Service to:

• Report a change in the donor's circumstances (e.g. moving into a care home)
• Update bank details so the pension is paid into the correct account
• Query payment amounts or request a pension statement
• Defer the State Pension if it has not yet been claimed
• Claim the State Pension on behalf of the donor if they have reached State Pension age but have not yet applied

To register as an attorney with the DWP, you will need to send a certified copy of the registered LPA to the Pension Service. The DWP will add a note to the donor's record so that you can act on their behalf in future calls and correspondence.

Dealing with Workplace and Private Pensions

Many donors will have one or more workplace or private pensions in addition to the State Pension. Each pension provider has its own process for accepting an LPA, but the general steps are similar:

1. Contact the provider — Call or write to the pension scheme's administration team to let them know you hold a registered LPA.
2. Provide a certified copy — Most providers will ask for a certified copy of the LPA (not the original). Some accept the OPG's online "Use a lasting power of attorney" service as verification.
3. Complete their forms — The provider may require you to fill in a third-party authority form or a specific LPA notification form.
4. Wait for confirmation — Allow two to four weeks for the provider to update their records. Once confirmed, you can manage the pension on the donor's behalf.

Register the LPA with each pension provider as early as possible — even if you do not need to make any immediate changes. This avoids delays when urgent action is needed later.

Pension Drawdown and Withdrawals

If the donor has a defined-contribution pension that is in drawdown, the attorney may need to manage how and when funds are withdrawn. This is one of the areas where understanding the scope of your financial decision-making powers is particularly important.

As an attorney managing pension drawdown, you may need to:

• Decide how much income to withdraw each month or quarter
• Choose between taking a tax-free lump sum and regular income payments
• Review the underlying investments within the drawdown plan
• Switch investment funds if the donor's risk profile has changed (e.g. they need more stable, lower-risk investments)
• Ensure withdrawals are sustainable and will not exhaust the pension pot prematurely

Annuities and Defined-Benefit Pensions

If the donor receives income from an annuity or a defined-benefit (final salary) pension, the attorney's role is usually more straightforward. These pensions pay a fixed or inflation-linked income, so there are fewer decisions to make. However, attorneys may still need to:

• Update the provider with new bank account details
• Notify the scheme of the donor's death (to trigger any survivor benefits)
• Request statements or tax information
• Query any underpayments or overpayments

Some defined-benefit schemes also offer lump-sum commutation options or trivial commutation for small pots. These decisions should be made carefully, taking into account the donor's overall financial position and care needs.

How Pension Withdrawals Affect the Donor's Tax

Pension income is subject to income tax, and the withdrawal decisions you make as attorney can have significant tax consequences. For example:

• Large lump-sum withdrawals from a drawdown pension may push the donor into a higher tax bracket for that year
• The first 25% of a defined-contribution pension can usually be taken tax-free, but timing matters
• If the donor has other income sources, combined income could trigger the personal allowance taper above £100,000

Attorneys should keep careful records of all pension withdrawals and seek professional tax advice where the donor's affairs are complex. Read our guide on how attorneys manage finances for more on record-keeping obligations.

Practical Tips for Attorneys Managing Pensions

If you are wondering where to start, that is completely normal. Managing someone else's pension can feel daunting, but the following steps will help you stay organised:

• Create a pension inventory — List every pension the donor holds, including provider names, policy numbers, current values and contact details.
• Register the LPA early — Contact each provider and the DWP as soon as the LPA is registered, even if no action is needed yet.
• Keep copies of everything — Maintain a file of all correspondence, statements and decisions you make.
• Use the Pension Tracing Service — If you suspect the donor may have lost track of old workplace pensions, the government's free Pension Tracing Service can help locate them.
• Review regularly — Check pension statements at least annually to ensure payments are correct and investments remain appropriate.
• Seek professional advice — For complex pension arrangements or large sums, consider instructing an independent financial adviser regulated by the FCA.

Pension payments are usually paid into a bank account, so you may also need to register the LPA with the donor's bank. Our guide on how LPAs work with banks explains the process.

Quick Answers on Managing Pensions With an LPA

This guide was last reviewed and updated on 16 March 2026. Information is based on current legislation and OPG guidance for England and Wales.

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