5 money mistakes people make in their 80s

This series looks at common financial mistakes people make at certain ages — with tips on how to avoid them.

Many of the money challenges we face in our 80s will feel familiar. In fact, if you’re in your 70s, much of this may already apply and you can read our guide to the money mistakes 70-somethings can make.

• Read: 5 money mistakes people make in their 70s

But your 80s are different. By this stage, financial planning is mostly about protection, clarity and making life easier — for yourself and for the people around you. Health, longevity and cognitive change can all play a bigger role. Time horizons may feel shorter yet, in many cases, they’re not as short as we assume.

Here are five money mistakes that can trip you up in your 80s — and how to avoid them.

1. Ignoring the potential impact of cognitive decline

It’s not pleasant to think about your brain slowing down. But the risk of cognitive decline goes up with age, and financial decisions are often among the first areas to become difficult.

The mistake isn’t experiencing cognitive change. It’s failing to plan for it while you still can.
Without the right safeguards in place, you could struggle to manage complex investments, miss bills, fall victim to scams — or leave loved ones unable to step in and help.

Putting a Lasting Power of Attorney (LPA) in place (both for property and financial affairs, and for health and welfare) can be one of the most important steps you take.

• Read more on Power of Attorney & Court of Protection

It’s also worth simplifying finances, documenting accounts clearly and making sure someone you trust understands the overall picture.

Planning early protects both your independence and your family.

2. Leaving estate planning too late

In your 80s, time becomes more significant in estate planning.

For example, gifts made more than seven years before death are generally outside your estate for inheritance tax (IHT) purposes. But leaving major gifts until your mid-80s or later means there’s a higher chance you may not survive the full seven-year period.

• Watch: Inheritance tax - What people get wrong about the 7-year rule

Other common issues include outdated wills, pension beneficiary nominations that no longer reflect your wishes, not making use of annual gifting allowances and failing to review the potential IHT impact of rising property values.

With divorce and remarriages becoming more common, modern families can change shape rapidly. It’s important to make sure you keep key documents up to date with your plans for passing on wealth.

If possible, try to have conversations with family members and tell them about your plans. This should help to avoid arguments or even costly legal disputes later.

3. Not having a clear plan for care costs

In your 70s, care might feel like a distant possibility. In your 80s, it becomes statistically more likely. According to the latest census for England and Wales, around one in ten people aged 85 and over were living in care homes.¹

Yet many people still assume the NHS or local authority will cover most costs. In reality, many people end up paying for some or all of their own care — and costs can run into tens of thousands of pounds a year.

In England, for example, if your assets (including property) are above £23,250, you’ll usually be expected to fund your own care. Rules differ across the UK, and support is means-tested.

Without a plan, you may face rapid erosion of your savings, forced decisions about selling property, and financial pressure on your spouse.

Planning ahead doesn’t mean assuming the worst. It means understanding:

• What care might cost in your area
• How it would be funded
• What impact it would have on your wider financial position

Even modelling a few scenarios can bring valuable clarity.

4. Underestimating how long your money needs to last

It’s natural in your 80s to feel that the future is limited. But many people live well into their 90s — and some beyond 100.

Fidelity’s own research shows that we consistently underestimate our own life expectancy, sometimes by a significant margin. That can lead either to being too cautious — i.e. holding too much in cash — or to withdrawing more than your portfolio can sustainably support.

• Read: The silent retirement risk we all ignore - and how to manage it

This is a particularly thorny issue for women, who live longer than men on average and typically have smaller pensions. One partner may spend a decade or more managing finances alone.

If your investments are too conservative, inflation could erode your purchasing power. If withdrawals are too high, you could place unnecessary strain on your later years.

Regular reviews can help ensure your income strategy remains sustainable, while still allowing you to enjoy life now.

5. Holding onto overly complex finances

Complexity can become a hidden risk in later life.

Multiple pensions, ISAs, investment accounts and bank relationships may have made sense over decades. But in your 80s, complexity can create administrative burdens for a partner or family member who needs to step in — and delays and stress for executors later.

This doesn’t mean dramatically changing your investment strategy. But it may mean:

• Consolidating accounts where appropriate
• Ensuring paperwork is clear and accessible
• Keeping a simple record of assets and key contacts
• Noting down gifts for IHT purposes, including date and value
• Reducing unnecessary layers of complication

Simplifying your financial life can be one of the most valuable gifts you give, both to yourself and to those who may one day need to help manage your money.

• Transfer your pension to Fidelity’s SIPP
• Transfer your ISA to Fidelity’s Stocks and Shares ISA

Fidelity's retirement specialists can provide you with free guidance to help you with your decisions. They can also provide advice and help you select products, though this will have a charge.

Read more from our series:

• 5 money mistakes people make in their 20s
• 5 money mistakes people make in their 30s
• 5 money mistakes people make in their 40s
• 5 money mistakes people make in their 50s
• 5 money mistakes people make in their 60s
• 5 money mistakes people make in their 70s

Got a burning question you want to ask? Why not drop us a line. Click here to ask your question.

• Read: Top 10 best-selling ISA and SIPP funds in February
• Read: What is the best way to invest in gold - ETFs or gold miners?
• Read: The tax benefits of an ISA 

Important information - investors should note that the views expressed may no longer be current and may have already been acted upon. Tax treatment depends on individual circumstances and all tax rules may change in the future. Withdrawals from a pension product will not be possible until you reach age 55 (57 from 2028). This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to one of  Fidelity’s advisers or an authorised financial adviser of your choice.