The Office of the Public Guardian (OPG) is to repay an estimated £89m to thousands of people who have registered a Lasting Power of Attorney (LPA) at some point during the current financial year.

The news comes after the OPG itself described the fees charged as “excessive” when compared to the actual costs involved in processing application costs.

Under existing rules, without previously obtaining specific legislative authority, Government agencies such as the OPG are unable to charge consumers more in processing fees than such tasks actually cost the agency itself to complete.

The OPG has described its overcharging as an “error” which it says can be attributed to the ever-increasing number of LPAs that have been registered during the past four years.

It has said that refunds adding up to an estimated £89m will be repaid to thousands of customers who have been affected by overcharging in the 2016/17 financial year.

The comments come shortly after the OPG lowered its registration fees on 1 April 2017, from £110 down to £82 for new applications, and from £55 to £41 for repeat applications.

An OPG spokesperson has said: “Increased volumes, coupled with greater efficiencies in processing applications, have resulted in fees being charged above the operational cost of delivering the service, without the Ministry of Justice (MoJ) having exercised the power provided by legislation to allow us to do this.

“We are committed to taking such steps as are necessary to make sure that people are made aware of, and receive, the refunds to which they are entitled.

“We will be working closely with MoJ and its new income strategy unit, which will oversee the standards and controls set for all income streams.”

Commenting on costs going forward, they said:  “We have also made a number of improvements to the way in which we forecast demand and associated costs, in order to enable us to base fee proposals on robust evidence and to ensure compliance with requirements set by HM Treasury.”

They added that further details would be announced “in due course”.

An LPA is a legal document which gives relatives or carers authority to handle the property and financial affairs of a loved one who is no longer able to look after themselves, or has lost the ‘mental capacity’ to do so.

Those wishing to set up an LPA can do so by seeking the advice of a specialist solicitor.