Five everyday money mistakes people make in their 40’s, 50’s and 60’s – and how to avoid them

Managing your money often becomes more complex as your life progresses. Careers peak, children grow up, health costs rise, and retirement moves from a distant idea to a real milestone on the horizon. Yet many people unintentionally make the same financial missteps during their 40’s, 50’s and 60’s – often without realising it.

We’ve gathered the five most common mistakes, explained why they matter and share practical ways to stay financially strong. Everyone’s financial situation is different, and the points below are intended as general information rather than personal recommendations.

1. Lifestyle Inflation Outpacing Income
   By the time you reach your 40’s and 50’s, the chances are your income has risen – but so have your expenses. Bigger homes, nicer cars and more frequent travel can eat away at your savings.

   
   This doesn’t mean you shouldn’t enjoy the rewards of your hard work. However, it’s important to make sure you still have an eye on the future.

   Too many luxuries can prevent you maximising your savings during your highest earning years. This can directly impact your retirement readiness.

   How to avoid it:

• It can be helpful to set clear savings goals. For example, try committing to saving a set percentage of your income per month.
• Consider adopting a ‘pay yourself first’ attitude by automating your retirement and investment contributions – that way you can’t forget.
• If your salary increases, you could consider gradually increasing your savings contributions as well.
  
  

2. Underestimating retirement needs
   Many people assume that their basic pension or employer contributions will be enough to maintain the lifestyle they are aiming for in retirement. However, in reality, this could fall short.

   
   Your retirement is likely to last around 20 to 30 years or more, and inflation can significantly reduce your purchasing power over time. Healthcare, long-term living costs and lifestyle spending can frequently be underestimated.

   How to avoid it:

• You might find it useful to use retirement calculators to get an idea of how your projected income compares with your expected spending.
• Consider aiming to save at least 10 – 20% of your income from your 40’s onward, where possible.
• It could be worth considering increasing your private pension or ISA contributions when you can.
  
  

3. Carrying High-Interest Debt into midlife
   Credit card balances, car finance and remortgaging for non-essential expenses are extremely common mistakes. This type of unsecured debt tends to have a relatively high interest rate and builds fast. This means you have to divert money away from your long-term savings to keep on top of your payments. Left unchecked, this can significantly delay financial independence and your retirement plans.

   
   How to avoid it:

• Many people find it helpful to prioritise paying down any high interest debt as early as possible.
• You might want to explore consolidating your debts but only if it reduces the total interest costs.
• Try to avoid taking on new debt unless it builds long term value e.g. it aids career development.
  
  

4. Not preparing for unexpected health or care costs
   Long-term care, private treatments and early retirement due to health issues often catch people financially off guard. Health costs can rise sharply with age, and unexpected early retirement can reduce the growth of your pension pot.

   
   How to avoid it:

• Consider building a dedicated emergency fund covering a few months of essential expenses.
• It could be worthwhile to take some time to occasionally review your life insurance, critical illness cover and income protection. Taking a moment to check for the best value policies may help you to feel more secure.
• Some people find peace of mind by setting up separate savings pots, specifically for healthcare or care costs, so these expenses don’t catch them off guard.
  
  

5. Failing to adjust investments with age
   Some people remain in higher risk investments for too long, while others can become too cautious too early. Either approach can reduce long-term returns or expose you to unnecessary risk at critical stages of your lifetime financial planning.

   
   Investment strategies often change through the decades, so it is really important to take advice on new investments. Consider having your portfolio reviewed annually to make sure that it stays aligned with your risk appetite and financial goals.

Your 40’s, 50’s and 60’s are critical decades for financial stability and retirement readiness. Avoiding these five common mistakes isn’t about drastic lifestyle changes. It’s about making intentional decisions that compound positively over time.

If you are concerned about your plans for retirement, get in touch with your financial planning manager and they’d be happy to help put your mind at ease.

We’re here to help

If you’d like some help with your retirement planning, or to chat through the investments you hold with Aegon Financial Planning, contact your Financial Planning Manager, call us on 0800 464 3079*, or request an appointment using the button below.

* Call charges vary. Lines are open Monday to Friday between 8.30am and 5.30pm. All calls are recorded for business purposes.

Afp266. Exp 04/2027