Carers in the UK are retiring with significantly lower private pension income compared to the national average, according to the 2025 Underpensioned Report. The report found that unpaid caring responsibilities continue to impact long-term financial wellbeing, especially for women and part-time workers.
Published by UK workplace pension provider now:pensions in partnership with the Pensions Policy Institute (PPI), the report found that the average pension income for carers is now just 49 percent of the UK average.
This marks a fall from 55 percent in 2020, showing a worsening pension gap for this group. In monetary terms, carers are retiring with an average of £6,750 in private pension income annually, compared to the £8,500 national average.
Carers are also less likely to be in full-time paid work. The report shows that only 61 percent of carers are employed, compared to 76 percent of the wider population. Female carers are disproportionately affected, with 38 percent working part-time, compared to 29 percent of all working women.
Workplace inclusion and policy reform
Now:pensions is calling for a series of reforms to help close the savings gap for carers. These include a family carer’s top-up to maintain pension contributions during periods of unpaid care, scrapping the £10,000 auto enrolment earnings trigger, and removing the lower earnings limit to ensure every pound earned counts towards pensions.
Samantha Gould, Head of PR and Campaigns at now:pensions and author of the report, said, “Carers provide essential support that many depend on every day, yet they remain systemically disadvantaged in their ability to save for later life. We urgently need pension reform that acknowledges and supports the vital unpaid work that carers do to help provide greater financial security in retirement.”
Data from the report also notes a disparity in earnings between male and female carers. While carers overall earn an average of £35,248 annually – below the national average of £38,740 – male carers earn £46,681, whereas female carers earn £28,176. This income gap adds to the challenge many women face in building adequate pension savings.
Eligibility gaps and auto-enrolment barriers
Eligibility for auto-enrolment remains a critical concern. While 10.8 percent of workers across the general workforce are ineligible, this figure rises to 13 percent among carers. Among female carers specifically, 14.6 percent do not meet the earnings trigger. These statistics reflect how irregular or part-time work, often driven by caring duties, can exclude individuals from workplace pensions entirely.
The issue is particularly acute for recipients of Carer’s Allowance. The report shows that just 25 percent of those on the benefit are eligible for auto-enrolment, leaving 75 percent with no workplace pension coverage.
Helen Walker, Chief Executive of Carers UK, commented, “It’s really worrying to see the employment rate of unpaid carers dropping. We know from our work with unpaid carers that they work below their potential, taking less senior roles or lower paid jobs. Working part-time or falling out of work completely can be catastrophic for unpaid carers’ finances in the short term and can leave a lasting negative imprint on their pensions in the future.
“Having a carer friendly employer can make the difference between carers staying in and leaving work. Carers Week is a great time to show employees who are unpaid carers that they matter; share supportive policies, consider moving towards paid Carer’s Leave and other measures to help unpaid carers in the workplace.”
A growing need for long-term solutions
The 2021 Census identified 5.8 million unpaid carers across the UK. Of those, 1.7 million provide 50 or more hours of care per week. While employment rates among carers have improved slightly since 2022, their access to private pension savings still falls behind.
Walker added, “With longer working lives and an ageing population, supporting unpaid carers in the workplace is becoming ever more important and we hope that people will join us in celebrating the theme of Carers Week this year, Caring about Equality.”
The report concludes that to improve retirement outcomes for carers, especially those working part-time or in low-paid roles, inclusive pension reform must remain a priority.
Alessandra Pacelli is a journalist and author contributing to HRreview, an HR news and opinion publication, where she covers topics including labour market trends, employment costs, and workplace issues. She is a journalism graduate and self-described lifelong dog lover who has also written for Dogs Today magazine since 2014.
- Alessandra Pacelli
- Alessandra Pacelli
- Alessandra Pacelli
- Alessandra Pacelli
