This has emerged in research by Lloyds Bank.
With 80% of over-55s saying that they don't have a power of attorney - a legal document giving one person the power to act for another person - in place, Lloyds is encouraging all ages to start thinking about the future, to ensure peace of mind.
Almost three in 10 people think a power of attorney is only put in place after they become ill.
However, Lloyds says a person must be capable of making their own decisions to set up a power of attorney, so leaving it until an illness or an accident occurs could be costly.
Worryingly, eight in 10 adults over 55 do not have a power of attorney in place for themselves, with 69% of this age group also not acting as an attorney for someone else.
Overall, almost a fifth of all respondents said they didn't know when the right time is to put an attorney in place for themselves, rising to a quarter of 35-44-year-olds.
A fifth of Britons also don't know when it's the right time to set up a power of attorney for someone else.
That's why Lloyds is encouraging people to start thinking about this issue earlier, not only for themselves, but also for family members.
Nicola Bannister, of customer financial assistance at Lloyds Bank, said:
"The idea of arranging a power of attorney - for yourself, or helping someone else - may feel daunting. It's not the sort of thing we talk about every day, and our research shows that many of us are not confident in our knowledge of the types of power of attorney or the costs involved.
"Broaching the subject of setting up a power of attorney can be tricky but it's worth finding the right time to discuss it with your loved ones, as it is a lot easier to discuss and arrange these things in advance of needing them, rather than at a time where things may be difficult for yourself or a family member."
The new research from Lloyds found that nearly two-thirds of UK adults are unable to explain the authority a power of attorney grants, with a quarter unaware of the difference between a will and a power of attorney.
The Law Society of Scotland says a power of attorney is a way of giving someone else permission to make decisions about your money and property, as well as your health and personal welfare.
It usually sets out what you would want to happen in the future if you could no longer look after your own affairs. In some circumstances, you can choose for it to start immediately.
As a power of attorney gives legal authority for someone else to act on your behalf, it is important to take advice from a solicitor.