Planning for the years beyond peak capacity
This article is written by:
Tony Sime
Partner at Downing
Most financial plans are built for the client sitting in the room today. But clients change, and the person who walks in at 55 often looks very different from the one who needs support at 75 or 85.
Clients are living longer, remaining wealthy for longer - and increasingly making complex financial decisions at a time when their cognitive capacity may be gradually changing. Many of you will know cognitive decline is rarely sudden or dramatic. There’s no single moment of failure. No obvious crisis. Instead, there is a slow erosion in attention, numeracy and decision-making confidence. Plans that assume full and sustained engagement can quietly stop working when that engagement becomes harder to maintain.
The opportunity for advisers is clear: to design plans that remain robust, understandable and effective, even as a client’s ability to engage changes over time.
A predictable risk advisers can plan for
Cognitive decline is not a niche concern. Around 10% of people aged 75 show signs of low cognitive function, rising to more than 40% among those in their late 80s.1 At the same time, life expectancy continues to improve and a 60 year old today has a meaningful chance of reaching 90.2
For advisers, the implication is not to fear decline - but to plan for it. This is about anticipating how risk shows up in practice and embedding resilience into client strategies from the outset.
In practical terms, this means:
- recognising cognitive change as a planning risk alongside market and longevity risk,
- understanding which planning strategies are most vulnerable to reduced client engagement, and
- favouring structures that can continue to function with minimal ongoing decision-making.
The responsibility is regulatory, not just good practice
The FCA requires firms to avoid causing “foreseeable harm” to retail customers and explicitly prohibits the exploitation of vulnerability.3 As our understanding of cognitive ageing improves, so too does the threshold for what counts as “foreseeable”.
Consumer Duty, introduced in July 2023, raises the bar further. Firms must actively assess, monitor and evidence client outcomes. Crucially, they must also anticipate vulnerability rather than simply react to it. Yet recent FCA data4 shows that while most firms have vulnerability policies on paper, far fewer have governance structures that demonstrate how outcomes are actually being overseen.
For advisers working with older clients, that gap is a risk. The concern is straightforward: recommending a strategy today that a client may struggle to understand or manage in five or ten years’ time increasingly carries regulatory as well as professional risk.
Cognitive decline is no longer hypothetical. It is a foreseeable risk and failing to plan for it may increasingly become a compliance issue.
Peak wealth and peak cognitive risk coincide
The challenge is sharpened by timing. Household wealth in the UK typically peaks between ages 65 and 74, with those over 75 holding the highest levels of property wealth.5 At the very moment clients are transitioning into drawdown and navigating Inheritance Tax planning, their cognitive processing speed and numerical confidence may begin to decline.
Adding to this complexity, forthcoming changes, such as defined contribution pensions moving within the scope of IHT from April 2027, mean retirement planning is becoming more intricate, not less.
In other words, the years when clients have the most at stake are often the years when planning complexity becomes hardest to manage.
Designing plans that still work when clients can’t engage
Advisers routinely assess market risk, and cognitive risk deserves the same discipline.
Some strategies remain resilient regardless of client engagement. Others depend heavily on ongoing decisions. Discretionary gifting, establishing trusts, active portfolio management and complex drawdown strategies all assume sustained numeracy and decision-making capacities.
By contrast, certain planning tools, such as Business Relief (BR), are less dependent on continued client involvement. Once invested and held for the qualifying period, BR can deliver IHT mitigation without requiring annual gifting decisions, complex administration or a loss of access to capital (subject to liquidity). The strategy continues to function even if the client’s engagement naturally reduces.
This distinction is critical. If a strategy only works while the client remains fully engaged, it requires a contingency. If it is designed to remain effective with minimal intervention, it is inherently more robust.
When recommending any strategy, ask:
- How many ongoing decisions does this require?
- Who will realistically make them in ten years’ time?
- What happens if the client can no longer engage in the same way?
Simplicity as a form of protection
Complexity is not inherently bad. Trusts, bespoke structures and layered solutions can be entirely appropriate earlier in life, particularly for blended families, business assets or multi‑generational planning.
But complexity ages. Trustees age. Administrative responsibility accumulates. Structures that solved one problem at 65 can create new ones at 80.
Protecting clients is not only about tax-efficiency or asset preservation. It is also about protecting clients, and their families, from structures that become unmanageable when cognition changes.
Families change and plans must keep pace
Cognitive decline is not the only variable over time. Families evolve too: new grandchildren arrive, relationships shift and beneficiaries change.
If advisers rely solely on clients to flag these changes, and clients become less able to do so, plans can quickly fall out of step with reality. Bringing trusted family members into the conversation earlier, and creating structured review points that do not depend entirely on client memory, helps keep plans accurate and expectations aligned.
This is not about removing client control. It is about ensuring that plans continue to reflect what clients intended when they were fully able to express it.
A glimpse of the future
Japan offers a preview of what lies ahead. With nearly a third of its population over 65, it is has already seen the financial impact of widespread cognitive decline.6
A significant proportion of household wealth is held by older individuals experiencing impairment. The erosion of value often occurs gradually, through delayed decisions, poor asset management and increased vulnerability to fraud.
Japan’s response has shifted from prevention to coexistence: designing systems that continue to function as capacity changes.
The lesson for UK advisers is clear: build simpler, more resilient plans while clients still have the capacity to shape them.
Planning for the future client
The clients sitting across from advisers today are not necessarily the ones who will be responsible for their own finances in 10 or 15 years’ time. That isn’t pessimism, it’s realistic planning.
The advisers best placed to serve the next generation of retirees will be those who plan not just for future markets or tax rules, but for the future client. Someone who may be less able to engage, decide or oversee complex arrangements.
When capacity declines, and for most clients it will, the outcome is rarely determined by what advisers do in that moment. It is determined by the quality of the planning done years earlier.
Advisers who plan for the future client don’t just manage risk more effectively, they give clients confidence that their intentions will still be carried out long after decision‑making becomes harder.
References
- Institute for Fiscal Studies (December 2025)
Cognitive decline and financial wealth at older ages.
Evidence showing that around 10% of people aged 75 exhibit low cognitive function, rising to over 40% among those in their late 80s.
- Office for National Statistics / The Health Foundation (February 2025)
Life expectancy calculator and projections.
Data indicating that a 60‑year‑old today has a material probability of reaching age 90, reflecting continued improvements in longevity.
- Financial Conduct Authority
Consumer Duty – “not once and done”.
FCA guidance outlining firms’ responsibilities to avoid foreseeable harm and to anticipate, rather than react to, customer vulnerability.
- Financial Conduct Authority
Treatment of vulnerable customers: multi‑firm review.
Findings showing that while many firms have vulnerability frameworks in place, fewer can clearly demonstrate governance and oversight of outcomes.
- Office for National Statistics
Total wealth in Great Britain, April 2020 to March 2022.
Data illustrating that household wealth typically peaks between ages 65–74, with those over 75 holding the highest levels of property wealth.
- Bloomberg (January 2026)
Japan’s dementia economy and its impact on household wealth.
Analysis of how widespread cognitive impairment among older populations affects financial decision‑making and long‑term wealth outcomes in Japan.
Important notice
Opinions expressed represent the views of the author at the time of publication, are subject to change, and should not be interpreted as investment or tax advice.
This article is for investment professionals only. This article is for information only and does not form part of a direct offer or invitation to purchase, subscribe for or dispose of securities and no reliance should be placed on it. No reliance should be made on this content to inform any investment of tax planning decision.
This content contains information that is believed to be accurate at the time of publication but is subject to change without notice. The explanation of all of the tax rules set out have been written in accordance with our understanding of the law and interpretation of it at the time of publication.
Whilst care has been taken in compiling this content, no representation or warranty, express or implied, is made by Downing as to its accuracy or completeness, including for external sources (which may have been used) which have not been verified.
