The ability to perform the instrumental activities of daily living (IADLs) is an important focus for the promotion of independent living in old age. If strategies to enable older people to remain in their own homes are to be developed, advances must be made in understanding the demands associated with IADLs. This paper reports on a study of how activity demands – the body postures, actions and hand functions involved in cooking, housework, laundering and shopping – relate to the capabilities of a sample of older people in Great Britain. Task data were analysed for 4,886 community-dwelling 55–93-year-olds who were enrolled in a follow-up survey to the 1996/97 Family Resources Survey. Logistic regression models were used to calculate adjusted odds ratios for associations between functional limitations and IADL difficulty. Attributable fraction estimates were also used to assess the population impact of the functional limitations. Comparable effect sizes were observed across activities for limitations in body postures (standing, reaching and bending/stooping), actions (lifting/lowering and holding/carrying) and hand functions. Most of the difficulties were attributable to limitations in body postures, primarily bending/stooping, whereas actions and hand functions accounted for much less difficulty. We present a matrix of the potential impact that design changes to alleviate each limitation would have on the ability to perform the activities studied. This can help to prioritise interventions aimed at supporting continued independent living.