By Philip Smith, Director of DC at TPT Retirement Solutions
Helping employees understand their pensions and plan early for their later life is key to improving employees’ mental health.
Recent research by TPT shows that almost half (49%) of working people aged between 50 and 59 are concerned about how they will access their pension savings. Planning for your pension is not an easy decision to make for anybody, but that decision is even more difficult for those who could face cognitive decline.
The reality is, that the older one gets, the higher the chance that an individual or dependent may face some form of cognitive decline. For example, the NHS estimates that one in six people aged over 80 suffer from dementia and it is expected that by 2025 the number of people affected by dementia will rise to over one million.
TPT believes it is crucial the pension industry offers more solutions to help individuals suffering from cognitive decline and those caring for them. Providing these solutions has been a particular challenge for defined contribution (DC) schemes, where the focus on pension freedoms means that members may often need to make complex financial decisions later in life.
Pension providers can reduce the distress of those facing cognitive decline, by adapting post-retirement communication channels to an older audience who may be making decisions with the help of a carer or family member. Clear and straightforward language, visual aids, and simplified processes can significantly aid comprehension and decision-making. Offering educational materials and seminars that address the unique challenges faced by individuals, with cognitive decline and their caregivers, can also foster a better understanding of the pension options available.
Pension providers can also assist those who are facing cognitive decline, by updating their policies for vulnerable customers. For instance, pension providers could employ AI to detect actions or transactions that may signal cognitive decline, and prepare suitable ways to address this.
