Son of Air Vice-Marshal John Frederick Powell and his wife Ysolda,[2] Powell was educated at the Cathedral Choir School, Canterbury; The King's School, Canterbury; and New College, Oxford, graduating BA in 1963 with first class honours in Modern History.

One brother, Sir Chris Powell, is an advertiser; another, Jonathan, was chief of staff to Prime Minister Tony Blair.

He chaired the international advisory board of Rolls-Royce and is a member of the advisory boards of Barrick Gold, Chubb Insurance and Thales, and a strategic adviser to BAE Systems and an adviser to Bowmark Private Equity.

He has three younger brothers, Chris (co-founder of DDB Advertising Agency, and currently chair of NESTA), Roderick (Rod), and Jonathan, the Chief of Staff to Prime Minister Tony Blair, a member of the Labour Party.

Powell was portrayed by Terence Harvey in the 2004 BBC production of The Alan Clark Diaries, by James Fox in 2009's Margaret and by Dominic Rowan in Netflix's The Crown.