Study: good money decisions end in middle age
New study suggests people are not as fit to make financial decisions after 53.
Are you too old to make good financial decisions? Research from the prestigious Harvard University suggests that your ability to make money decisions peaks at the ripe old age of 53.
The university measured two types of intelligence that help people to manage their money:
- Crystallised intelligence is based on skills acquired through experience, so it improves with age
- Fluid intelligence marks your ability to solve new problems, which declines with age.
Overall, they found that cognitive performance slows after your mid-50s when crystallised intelligence fails to offset fluid intelligence.
And by the time people reach their 80s, half of the population suffers from a significant cognitive impairment which renders them incapable of making financial decisions.
There are currently 1.38 million people over the age of 85 in the UK and that is forecast to double in the next 20 years. Dementia affects one in six people over 80 and one in three over 95.
In a recent study, the Money Advice Service (MAS) asked people across a range of ages to pick the best deal of two financial products and almost 20% of the over 55s chose the wrong one. 89% got the choice correct overall.
If you’re under 53, make the most of your prime and work out how much you need to save for retirement with our simple guide.
See an instant snapshot of your personal wealth with our new Plans service
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