LPA opening bank accounts

[RichA]

MiL is in a care home with dementia.
MrsA has LPA.
We've just sold her house to provide funds to pay for the care home.
A decent chunk of cash is now sitting in MiL's bank account.
We need to split it up between banks so it's all covered by the financial compensation scheme.
MrsA has been trying to do this for a while but the banks are a nightmare about opening new accounts using LPA.
Does anyone have any experience of this scenario who would be kind enough to offer some advice, please?

 

[Bunkermagnet]

I cannot answer your question, but as I assume she has more money than the limit before she has to self fund her care, could you not put the money into fresh accounts in just your wife’s name once her main account is close to the limit of protection.
One thing I would suggest is not to fill those accounts to the £85k limit, as you only need an interest payment to take you over the protection level, so personally I would limit the amount you put in each account to say £70k or £75k, which at 5% is £3500 a year interest added.

 

[backwoodsman]

Also don't know the solution - but worth remembering that the proceeds of the sale of a main residence - up to £1million - are protected (as a 'temporary high balance') by the FSCS for up to 6 months. So, depending on how much time has elapsed, you probably still have time to sort things.

 

[Lord Tyrion]

AGE UK and the Alzheimers Society will give good advice on this. I can only remember snippets of what my wife did regarding managing my MIL's accounts with LPA and I don't want to give incorrect advice on such an important subject. I do know she used those organisations for advice and both were excellent.

 

[RichA]

Thank you, guys.
Yes, we have a few months to get it sorted.
The law governing LPAs is pretty clear that MrsA can't just keep the cash in her own name. It has to be completely separate otherwise it looks like we're trying to sneak it away for ourselves or evade future tax liabilities.
There's surprisingly little advice online, but I'll try the fossil charities.
The banks have been singularly unhelpful:
"She needs to come into a branch with you."
"Erm, she's disabled, has dementia, lives over 100 miles away and we work weekdays."
"Oh how terrible. She needs to come into a branch with you."

 

[Lord Tyrion]

The banks have been singularly unhelpful:
"She needs to come into a branch with you."
"Erm, she's disabled, has dementia, lives over 100 miles away and we work weekdays."
"Oh how terrible. She needs to come into a branch with you."

That's appalling. We were lucky in that my MIL's local branch had it's staff all go on a Dementia Friends course and as a bank were very savvy with this. Basically, as soon as we advised she had dementia and could show the LPA they could not have been more helpful. My wife had total power to act as though she was my MIL. After all, that's the whole point of this.

What is the branch going to do in this instance, ask her questions to prove that she can not answer them? Absolutely ridiculous. Check with HO to see if they have a dementia policy, they should have, and ask to see it.

 

[RichA]

Her own bank (RBS) have been fine, but we've been using the LPA with them for a year or 2. It's trying to open new accounts to safely spread the house cash that's proving to be the issue. Currently renewing the passport of an 80-year old who hasn't left the UK since 1975 so we have valid photo ID to open accounts in her absence. Not sure what the point is of photo ID if its owner is 100 miles away, but a few of them are insisting on it.

 

[woofers]

A couple of Investment Platforms, Flagstone and Hargreaves Lansdown offer multiple bank savings accounts. You'll still need to go through all the hoops regarding LPA identity checks and so on, but only once with the platform. You can then put the money away in the different accounts they offer. There will be some one off charges and I believe they offer slightly lower rates compared to going direct, but it may be worth it for the reduced hassle.

 

[Bunkermagnet]

I had a look on the MSE website (Martin Lewis) and for current accounts, Starling Bank would open an account in 2 days from having the neccessary forms, with the only proviso was that you had to have a Starling account already.
As a personal account holder and business banking user (which is free!!) they are excellent, and if memory serves me correct you get 3% on monies with a personal account with them.

 

[fundy]

I cannot answer your question, but as I assume she has more money than the limit before she has to self fund her care, could you not put the money into fresh accounts in just your wife’s name once her main account is close to the limit of protection.
One thing I would suggest is not to fill those accounts to the £85k limit, as you only need an interest payment to take you over the protection level, so personally I would limit the amount you put in each account to say £70k or £75k, which at 5% is £3500 a year interest added.

No need to be so low below the threshold, the first 85k is covered even if you do go slightly above anyway (alternatively put the 85k in and ask for interest to be paid to a different account)

 

[Bunkermagnet]

No need to be so low below the threshold, the first 85k is covered even if you do go slightly above anyway (alternatively put the 85k in and ask for interest to be paid to a different account)

Yes you can do that, but I was thinking about acrueing the interest in that same account and giving you room to grow before you have to start splitting it up.
My thinking was they would have enough on their plate

 

[Mark1751]

Pop into your desired bank or banks explain you need to open an account for mum and you have a LPA and they will assist (some will try and get you to open online first then speak to their department to complete the registration of the LPA) you can open an account without mum being there. Might be worth looking what Baka are owned by who and what banking licences they have (Lloyds banking group have separate licences for Lloyds and Halifax therefore 2 x £85k coverage) If the banks are not helping as to speak to manager and raise a complaint (annoying I know) we have processes in place for this and they shouldn’t be stopping you.

 

[Bunkermagnet]

Pop into your desired bank or banks explain you need to open an account for mum and you have a LPA and they will assist (some will try and get you to open online first then speak to their department to complete the registration of the LPA) you can open an account without mum being there. Might be worth looking what Baka are owned by who and what banking licences they have (Lloyds banking group have separate licences for Lloyds and Halifax therefore 2 x £85k coverage) If the banks are not helping as to speak to manager and raise a complaint (annoying I know) we have processes in place for this and they shouldn’t be stopping you.

Sadly mainy high street branches are closing, and the standard of staff knowledge has dropped off dramatically.
My wife did 24.5 yrs with the Scabbyfax before they shut her admin centre. She often says the knowledge of the current staff just isn't up to what it was (for example they couldnt get our mortgage amounts right for ages, and yes an official complaint went all the way)
She is mightily impressed with the likes of Starling though, and has no qualms about using them.

 

[RichA]

Pop into your desired bank or banks explain you need to open an account for mum and you have a LPA and they will assist (some will try and get you to open online first then speak to their department to complete the registration of the LPA) you can open an account without mum being there. Might be worth looking what Baka are owned by who and what banking licences they have (Lloyds banking group have separate licences for Lloyds and Halifax therefore 2 x £85k coverage) If the banks are not helping as to speak to manager and raise a complaint (annoying I know) we have processes in place for this and they shouldn’t be stopping you.

This was not MrsA's experience a couple of weeks ago when she had a spare weekday to make enquiries.
She went to all 7 of our local high street branches in possession of a copy of the LPA.
3 were an immediate no.
3 were don't know and nobody here knows - try phoning
1 was yes, but you'll need her passport and a recent utility bill.

 

[Voyager EMH]

Did exactly this about 10 years ago for my mum.
Building Societies were generally helpful and mum did not have to attend in person.
One thing that did bug me was the PoA document itself. You should only need to present it, NOT surrender it.
You may permit them to photocopy it, but it should not be taken away from you to another room. It should remain in your possession and in your sight at all times.
You can remind them that the document cost money to obtain and that if you surrender it, you would like a cash deposit given to you in the meantime.
They keep hold of something of yours, so you keep hold of something of theirs.
Once a photocopy is taken you should check the photocopy yourself page by page and ask for conformation with the member of staff that there are no missing pages.
Hearing two weeks later that there is a problem because a page is missing is a delaying tactic to put everything on the "do later" pile and means you have to attend again.

In a branch of the Nottingham Building Society everything was done in one room with just me and one member of staff. By far the best service.

I had to attend each place three times.
1. Explain what I wanted to do and make an appointment for later.
2. Go through all the paper work to set up the account.
3. Make the transaction after everything was verified.

Another thing to look out for is two Banks or Building Societies that are part of the same overall company. Only covered by £85K limit for totals in that company.
(Already explained by Mark1751 above)

My top three performers with regard to this service were Nottingham BS, Coventry BS and Coop Bank.
If a member of staff has had the necessary training, it is fairly straight forward. If they simply don't have anyone capable - no chance.

 

[Mark1751]

This was not MrsA's experience a couple of weeks ago when she had a spare weekday to make enquiries.
She went to all 7 of our local high street branches in possession of a copy of the LPA.
3 were an immediate no.
3 were don't know and nobody here knows - try phoning
1 was yes, but you'll need her passport and a recent utility bill.

This surprises me as not my experience in my branches. If your comfortable open an account online, then call the bank to register the LPA by phone if not happy or getting anywhere with the branches.

 

[cunnini]

Good point from Voyager re training - re my parents, local TSB said to me make the appointment with Mrs X, as she has had the LPA training, made appointment and came back on said day, was there i guess 30 minutes and all done. They (and she) said if they haven't been trained on bank process for LPA they'll get it wrong as it's not overly common thing for them to do so not everyone is trained on it.

Good luck

 

[RichA]

A couple of Investment Platforms, Flagstone and Hargreaves Lansdown offer multiple bank savings accounts. You'll still need to go through all the hoops regarding LPA identity checks and so on, but only once with the platform. You can then put the money away in the different accounts they offer. There will be some one off charges and I believe they offer slightly lower rates compared to going direct, but it may be worth it for the reduced hassle.

Haven't had a chance to enquire whether this would work with LPA but I did have a casual glance at Flagstone last night. If they will allow us to open and operate an account in MiL's name using the LPA then it is exactly what we need.
Thank you.

 

[RichA]

Thanks to @woofers
Spoke with Flagstone today. It's not on their website, but they offer an account for use with LPA and are emailing me the application form.
One application, necessary but less onerous ID hoops to jump through than the banks. The investment platform spreads the cash across a variety of financial institutions such that you have 100% compensation cover. After the fees it will return over 5% fixed interest with no significant risk.