{"id":322025,"date":"2025-12-03T05:07:09","date_gmt":"2025-12-03T05:07:09","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/322025\/"},"modified":"2025-12-03T05:07:09","modified_gmt":"2025-12-03T05:07:09","slug":"cognitive-decline-costing-pensioners-30000","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/322025\/","title":{"rendered":"Cognitive decline costing pensioners \u00a330,000"},"content":{"rendered":"

Cognitive decline is costing older people around \u00a330,000 in financial wealth over an eight to 10 year period, according to new research from the Institute for Fiscal Studies (IFS).<\/p>\n

The findings highlight how deteriorating memory and decision-making abilities can leave retirees increasingly vulnerable when managing their money.<\/p>\n

The study shows that more than four in ten people in their late eighties experience low cognition, defined as scoring below seven out of twenty on word recall memory tests.<\/p>\n

Rates of reduced cognitive function rise sharply from the mid-seventies onward.<\/p>\n

Between two and five per cent of people in their fifties and sixties record low cognition scores.<\/p>\n

This climbs to fourteen per cent among those in their late seventies.<\/p>\n

Memory scores drawn from the English Longitudinal Study of Ageing fall by roughly one third between the early sixties and late eighties.<\/p>\n

The steepest declines take place after age seventy-seven.<\/p>\n

The shift towards defined contribution pensions has added new pressures for those approaching retirement.<\/p>\n

Unlike traditional pension schemes, these pots are rarely converted into annuities that guarantee income for life.<\/p>\n

\"Man<\/p>\n

The one thing costing pensioners \u00a330,000<\/p>\n

| <\/p>\n

GETTY<\/p>\n

This means more older people must continue making active financial decisions well into their later years.<\/p>\n

Many will do so as their cognitive abilities decline, increasing the risk of costly mistakes.<\/p>\n

Average memory performance stays relatively stable through the fifties and into the mid-sixties.<\/p>\n

However, scores typically begin to fall from the late sixties, with particularly sharp drops among people in their eighties.<\/p>\n

The combination of increasingly complex financial products and advancing age creates significant challenges for long-term financial security.<\/p>\n

The report warns that this environment places additional strain on those least equipped to navigate difficult choices.<\/p>\n

\"PensionersThe majority of pensioners living in poverty in the UK are women, research has found | GETTY <\/p>\n

Educational background plays a clear role in rates of cognitive decline.<\/p>\n

Among people in their fifties with degrees, fewer than two per cent show low cognition, compared with seven per cent of those without qualifications.<\/p>\n

This difference persists into very old age.<\/p>\n

By the late eighties, one third of degree holders record low cognition scores, compared with half of older adults without formal qualifications.<\/p>\n

The financial impact is most severe for wealthier households.<\/p>\n

Those in the upper half of the wealth distribution lose the largest sums when cognitive decline sets in, both in total value and as a share of assets.<\/p>\n

Greater exposure to complex or higher-risk investments may partly explain these sharper falls.<\/p>\n

The IFS stressed that the declines cannot be explained by care costs or financial gifts.<\/p>\n

Even people who never receive formal care services display the same pattern of falling wealth.<\/p>\n

This suggests that the central factor is declining decision-making capacity rather than health or family support.<\/p>\n

Pension industry representatives have called for major reforms in response to the findings.<\/p>\n

Kirsty Ross, Head of Proposition at People’s Partnership, which provides the People’s Pension, said: “This report provides even further clarity of the impact of cognitive decline on retirement decision-making, and correlates with our extensive research, ‘New Choices, Big Decisions’.”<\/p>\n

She said complexity within retirement products increases the risks for older adults.<\/p>\n

“This latest research reinforces the case for simpler, guided retirement pathways that help people make sustainable decisions without having to become pension experts”, Ms Ross added.<\/p>\n

She said upcoming decumulation reforms give providers and policymakers an opportunity to create systems that deliver clarity and protection for people as they age.<\/p>\n

These measures include new requirements for UK pension schemes to offer default retirement income products.<\/p>\n

The IFS said default options that use part of a pension pot to buy an annuity at age seventy-five or eighty could help safeguard older savers.<\/p>\n

\"Family\"\/<\/p>\n

Steps can be taken to stave off the financial impacts of cognitive decline<\/p>\n

| <\/p>\n

GETTY<\/p>\n

This would remove the need for individuals experiencing cognitive decline to manage complex decisions alone.<\/p>\n

Establishing power of attorney is another step individuals can take before decline becomes pronounced.<\/p>\n

The gradual nature of cognitive deterioration offers a window for action by policymakers, pension providers and savers themselves.<\/p>\n

International research indicates that financial errors become more common with increasing age.<\/p>\n

The report argues that timely intervention could protect older people from avoidable financial losses.<\/p>\n","protected":false},"excerpt":{"rendered":"Cognitive decline is costing older people around \u00a330,000 in financial wealth over an eight to 10 year period,…\n","protected":false},"author":2,"featured_media":322026,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[45,49,48,133,134,6107,131,132],"class_list":{"0":"post-322025","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-business","9":"tag-ca","10":"tag-canada","11":"tag-finance","12":"tag-money","13":"tag-pensions","14":"tag-personal-finance","15":"tag-personalfinance"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/322025","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=322025"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/322025\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/322026"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=322025"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=322025"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=322025"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}