Alzheimer’s and dementia: the financial risks, how to prevent them, and seven steps to protect yourself

• World Alzheimer’s Day is on 21 September
• Alzheimer’s Society estimates there to be 982,000 people with dementia in the UK, but more than a third don’t have a diagnosis
• Dementia and Alzheimer’s disease was still the main underlying cause of death in 2025, accounting for 12.7% of all deaths according to the ONS
• Dementia can cause issues with people’s finances, from symptoms in the early stages to care needs later in life
• Seven things to consider while you’re well to protect your finances

Sarah Coles, head of personal finance at AJ Bell, comments:

“The sheer number of people facing Alzheimer’s and dementia means there’s every chance that you’ll come into contact with it during your life – either as a sufferer, a carer, or a family member of someone with it. It can be incredibly distressing for everyone involved, but it can also have profound financial implications. 

“In the early stages, even before symptoms aren’t obvious, it can cause money confusion and mistakes for the person in your life facing this disease. As it progresses, the family will need to take steps to protect them. It’s important to keep an eye out for the older people and those more likely to develop the disease in our lives, looking for the key financial risks associated with Alzheimer’s and dementia, well before they get to the stage of diagnosis.

“However, this shouldn’t wait until we’re much older and more likely to worry about symptoms. It’s essential to take steps with our own finances, while we’re in good health, to make it easier for people to help us if we need it.

A dozen risks to watch for

“Noticing the signs may not come naturally, especially as coming to terms with symptoms of Alzheimer’s and dementia in yourself or a loved one can be painful. But it’s important to try and spot when someone may be starting to struggle to ensure you can all be as prepared as possible from a financial standpoint. We’ve looked at 12 possible risks to keep an eye out for:

1. Repeatedly paying the same bills, or forgetting to pay bills altogether
2. Stopping opening post – including statements and bills – as it’s too overwhelming
3. Losing track of their finances and running up debts
4. Losing the ability to weigh up investment decisions, and taking inappropriate risks
5. Drawing too much from their pension because they can’t think through the consequences
6. Making unexpected impulse purchases, or repeatedly buying multiples of the same items
7. Not being able to pay for essential shopping, because they can’t remember their PIN
8. Repeatedly losing cards and wallets – both in and out of the home
9. Falling victim to scammers targeting the vulnerable, because it can be difficult for them to know who to trust
10. Being a victim of financial abuse from friends, family or carers
11. Forgetting they have spent money and thinking someone must be stealing from them
12. Getting defensive, paranoid or secretive, especially if they feel ashamed of forgetting things

What you can do when a loved one shows symptoms of, or has, dementia

“It can help to encourage older people to pay bills by direct debit well before they show any signs of illness, so you don’t have to worry about unpaid bills. The same applies for anyone who you suspect may be developing symptoms. It’s worth visiting them regularly if you can, and keeping an eye out for unopened mail and new purchases, especially things they don’t need, multiples of the same item, or things you wouldn’t normally expect them to buy.

“If they have a joint account with a partner, someone can keep an eye on their finances. They can check for large, unexpected withdrawals or payments they don’t recognise, which could be signs of a scam or unusual spending behaviour. They can also make sure they’re not going into debt. If they don’t have a joint account, before they lose mental capacity they can ask their bank to set up a third-party mandate, so you can check their account and help them manage their day-to-day banking.

“Speaking to other financial organisations, such as pensions and investment companies, to flag they are a vulnerable customer can also help, as they will consider any appropriate additional controls to help support them and keep the account safe. At AJ Bell, for example, there can be additional safeguards put in place around any withdrawal request.

“If they forget their PIN, they can speak to their bank and ask for a chip and signature card instead. They can also ask the bank to limit spending on the card if needs be. If they regularly lose wallets and cards, they can put spending limits on cards so they can’t be used by anyone finding them. It can also help to have more than one wallet, because losing them can often be very distressing.

“If there’s a risk of scammers reaching them by phone or mail, you can register with the Telephone Preference Service and the Mail Preference Service to stop junk mail and unwanted phone calls. You can ask them to share their email password with you, so you can make sure they’re not being approached online either.

“Where they have a lasting power of attorney, it will either state that the attorneys can act for them as soon as it is registered, or when they have lost mental capacity. If you don’t need to prove a loss of mental capacity, you have far more flexibility to step in when you are concerned about them. Otherwise, you will need a medical professional to confirm they don’t have mental capacity before you can do so.

“Even if you’re managing their overall finances, it’s often important for people to retain their independence for as long as possible, so you may be able to put guardrails in place and give them some control. So, for example, they may have a pre-paid card, a card on an account with a limited sum of cash in it, or an account with spending limits. This lets them continue to do their own shopping without the risk of overspending. You can also keep a small amount of emergency cash if they forget their PIN or lose their cards.

“If they prefer to use cash, it’s a good idea to withdraw the same amount of money each week and get a receipt. If they are able to keep a cash book and write down everything they spend, it can help them remember where the money has gone.

Seven steps to protect your finances while you’re well

“The most important thing anyone can do while they’re well, regardless of whether they eventually fall ill or not, is to ensure they have their financial affairs in order. This will reduce the risk of financial pitfalls for someone who goes on to develop dementia and protect them and their families. Here are seven steps to consider:

1. Talk to your family. As dementia progresses, it can be difficult to think these things through and discuss them, so it’s worth ensuring everyone understands what you want in terms of both your care and your finances.
2. Draw up a lasting power of attorney. These are legal documents that let you nominate someone – or a number of people – to make decisions when you no longer have the mental capacity to make them yourself. It’s worth having both types – one will let someone make medical decisions for you and the other is around financial decisions. This will let someone you trust take control of your finances when they need to. Without it, the process is much more complicated and expensive.
3. Talk your attorneys through your affairs. This will ensure they know how to pay your bills, where to find assets and what to do with them.
4. Make a will. If you have started suffering problems with your mental capacity, it’s too late to draw up a will, so you should make it a priority to do it sooner rather than later.
5. Make things simple. Throughout our lives we can end up building up multiple accounts, from ISAs to pensions, savings and current accounts. As we get older, it can help to consolidate accounts, to make it easier to keep on top of everything. This in turn will make it more straightforward for anyone who needs to help you with your finances. Just take care you’re not giving up any valuable benefits or incurring hefty charges when you move things like pensions.
6. Consider whether having a financial adviser makes sense. If you’ve always managed your own finances and investments without help, this may feel like a big step. But it can help to have a financial professional to look after the day-to-day as you get older, and you have the peace of mind they’ll be there to help if you need to hand your finances over to an attorney with less investment experience.
7. Consider how you would pay for care. The costs can be astronomical, so you may not be able to save a specific pot of cash. However, if you have emergency savings to cover one to three years’ worth of essential expenses, it can help. If you’re making preparations early enough in life, you could consider investing, to give your money the best possible chance of growth. Some people will ringfence money in their pension to pay for care. If you intend to do this, you may need to increase your contributions so you can take the income you need and still cover the cost of care. There’s also a good chance that many people will need to use the value of the family home to cover the cost – renting it, using equity release, or selling up. It’s worth talking to your family about your wishes well in advance, so they know what to do when the time comes.”