Abstract Summary Patients suffering from complications during inpatient treatment after hip fracture surgery are associated with a worse mid-term outcome. While surgically treatable complications only delay the healing process, internal complications seem to worsen the outcome in the long run. All complications come with significant increased costs during the hospital stay. Purpose Due to the demographic changes, the importance of hip fractures is still increasing nowadays. Not only surgical but also medical complications represent a major challenge in the treatment of those patients. Nevertheless, only few is known about the functional, medical, and economic consequences of complications. Methods A total of 402 hip fracture patients ≥ 60 years were observed prospectively at a German university hospital. Complications were assessed during the inpatient stay and classified by Clavien and Dindo. Afterwards their influence on acute care costs was examined as well as their influence on the mortality, health-related quality of life (HRQL) (EQ5D), functional capacities (Barthel index), and mobility (Tinetti score) in the follow-up periods of 6 and 12 months. Results Complications that required surgical revision/treatment (type III) were associated with an increased 6 months’ mortality, while type II and IV complications did not influence mortality after 6 and 12 months. Six months after surgery, HRQL, Barthel score, and Tinetti score were reduced in patients suffering from all different types of complications. After 12 months however, HRQL, Barthel score, and Tinetti score following type II and IV complications remained reduced, while the scores improved in patients suffering from type III complication. All types of complications led to significantly increased acute care costs. Conclusions The results of the present study emphasize the crucial role of perioperative complications in older patients with hip fractures. Therefore, special attention has to be given to the prevention of those complications, e.g., with orthogeriatric treatment models, which have been shown to be effective in the reduction of complications.