Your 40s and 50s are often peak earning years. But they’re also the years when financial mistakes can have the most lasting consequences. The decisions you make now will shape your options in retirement and beyond.

At NOVA Wealth, we work with individuals who want their wealth to work harder. Here are 10 of the most common-and costly-mistakes to avoid if you're serious about building long-term financial security.

1. Ignoring pension allowances

Pensions remain one of the most tax-efficient ways to save for retirement. Yet many fail to take full advantage:

• For the 2025/26 tax year, the annual pension contribution allowance is £60,000 (subject to tapering for very high earners).
• You may also be able to carry forward unused allowance from the past three tax years.

Failing to make use of these rules can mean missing out on valuable tax relief.

2. Underestimating retirement income needs

A comfortable retirement requires more capital than many expect, especially if you want your income to rise with inflation.

• Make sure you understand your State Pension entitlement and whether your National Insurance record is complete.
• Use cashflow modelling to estimate how much you really need to retire on your terms.

3. Not using ISAs efficiently

The £20,000 annual ISA allowance is a powerful tool for building tax-free wealth-but many overlook it. Choosing what type of ISA to use is a key planning consideration.

• ISAs can provide flexibility in later life.
• Relying too heavily on taxable investments can limit your options down the line.

4. Over-concentrating on property

Property can be part of a smart plan, but diversification is key, as with any financial plan.

• Consider balancing property exposure with pensions and ISAs that are invested in diversified portfolios.

5. Ignoring inheritance tax exposure

For a single person, if your estate exceeds the individual tax free threshold of £325,000 (plus the residence nil-rate band), 40% of the excess could go to HMRC.

• Many people leave estate planning too late, reducing the effectiveness of gifting or trust strategies.
• The earlier this is addressed, the greater the peace of mind for you.

6. Neglecting protection needs

In your 40s and 50s, your financial responsibilities like mortgages and dependants are often at their peak.

• Review your life cover, income protection, and critical illness policies.
• Employer benefits are often limited and may not move with you if you change jobs.

7. Not planning for education costs

Private school and university fees can place a huge strain on finances if not planned for.

• Without a strategy, people can often be unsure where the most effective place to fund these costs should come from
• Early planning can provide more options and reduce stress.

8. Forgetting about long-term care

Later-life care can be expensive and is often underestimated.

• Without a plan, you may be forced to sell assets or compromise your legacy.
• Start thinking about how you’d fund care while you still have time to plan effectively.

9. Overlooking business owner planning

Entrepreneurs often focus on growing their business-understandably so-but this can lead to planning blind spots.

• Consider pension contributions, business relief eligibility, and eventual exit strategies.
• Failing to plan ahead can result in unnecessary tax liabilities on sale or succession.

10. Not having a holistic financial plan

Decisions made in isolation-such as chasing returns or timing the market-can lead to long-term inefficiencies.

• Integrated planning involves cashflow modelling, scenario testing, and coordination between investments, tax, and lifestyle goals.
• It’s not just about the numbers. It’s about peace of mind.

Final thoughts

Financial planning in your 40s and 50s is about more than just accumulating wealth. It’s about aligning your money with the life you want-now and in the future.

Avoiding these mistakes doesn’t guarantee success, but it can significantly improve your chances of achieving financial independence with confidence.

Talk to us about your financial future If you're ready to build a plan that fits your goals, NOVA Wealth can help. We provide holistic financial planning for individuals with complex needs. Book a Discovery Call today.

Capital at risk. Investments can go up and down in value, so you could get back less than you put in. This article does not constitute personal advice. Prevailing tax rates and reliefs are dependent on your individual circumstances and are subject to change.