Research brief to tackle cognitive decline in older Australians—11 April 2018

The Australian Research Ccouncil (ARC) Centre of Excellence in Population Ageing Research (CEPAR), in collaboration with Neuroscience Research Australia (NeuRA), has published a new research brief—Cognitive ageing and decline: Insights from recent research—which explores the spectrum of cognitive ageing and its impacts on individuals, society and the economy. One area of interest is how cognitive ageing will affect financial decision making of an older population.

Cognitive decline is feared by many as they approach old age. However, the severe cognitive decline associated with dementia is not a normal part of ageing. In Australasia, the prevalence of dementia in those aged 60 and over is less than seven percent and though it increases with age—less than half of people in their early 90s experience symptoms of dementia.

Even mild cognitive limitations and changes in processing speed or acquisition of new knowledge will have significant impacts on how Australians make financial decisions.

Financial decisions are complex for Australians of any age. “Australians nearing retirement score higher in tests of financial literacy than younger people or those in other countries, but about half of them answer basic questions about inflation, interest rates, and diversification incorrectly,” reveals Professor Hazel Bateman, CEPAR Chief Investigator at UNSW Business School.

Research insights point to some solutions, which are also being investigated by policy makers.

“At CEPAR we are embarking on a program of research that will help identify how the oldest old process information relating to the Australian retirement income system. This will combine insights from psychology, economics, and behavioural finance,” said Proffessor Bateman.

“The need to allow individuals their financial freedom while mitigating confusion and poor decision-making among this age group is something that has yet to be reconciled in the literature and in policy.”

Media issued by the ARC Centre of Excellence in Population Ageing Research.

 

Image: about eight percent of Australians in their 60s are experiencing mild cognitive impairment.
Source: EU 2016 NL on Flickr (CC BY 2.0)

Original Published Date: 
Wednesday, April 11, 2018