A quarter of people believe they will take on caring responsibilities by the time they reach 67, the age at which they will qualify for the State Pension from April 2026. However, according to recent research provided to HR review, half of individuals become carers by the age of 50 – much earlier than many anticipate.
Research by Phoenix Insights, the longevity think tank of savings and retirement business Phoenix Group, shows that this could contribute to a significant shortfall in retirement savings as many people underestimate the impact that caring for family members has on their working lives and long-term financial wellbeing.
The research found that 47 percent of carers aged 60 to 65 have no private pension savings at all. Among those who do, carers have on average 17 percent less saved than the UK average, which equates to a gap of nearly £37,000.
Carers face financial insecurity
Patrick Thomson, head of research analysis and policy at Phoenix Insights, noted the connection between labour market changes and retirement readiness.
“Over the last 30 years we’ve seen major changes in the labour market, with higher overall employment rates, particularly for women. Despite this there are still large number of people economically inactive who are not in work for caring, health or other reasons – hampering their ability to save for their retirement,” he said.
He added that as the population ages, people are increasingly taking on caring roles earlier than expected, often for multiple generations, and that this shift places them at a heightened risk of financial insecurity later in life.
Cost-of-living pressure and future risk
The financial challenges facing carers are not limited to long-term savings. Previous findings from Phoenix show that 45 percent of unpaid carers are struggling to cover basic living expenses because their caring responsibilities have taken them out of the workforce.
The report also points to a widespread uncertainty about the future. When asked how clearly they could imagine their lives in the years ahead, 44 percent of respondents said they had a clear view of the next five years. This dropped to 31 percent when thinking about the next 15 years, suggesting that many are planning based on short-term needs rather than long-term financial health.
Employer support for working carers
Sara Thompson, Chief People Officer at Phoenix Group, said many people are forced to make difficult choices between work and family. “People shouldn’t have to choose between caring for a loved one or going to work, but many have to do so with an estimated 2.6 million people leaving the workplace to care for a relative or loved one which is having a negative impact on their ability to save for their private pension.”
She added that employers have a role to play in supporting working carers, both to retain skilled staff and to protect their future financial wellbeing. This includes offering flexible working arrangements and paid carers leave to enable people to remain in employment while managing their caring duties.
Providing flexible options and recognising the dual demands on working carers can help organisations retain experienced employees while contributing to their financial resilience in later life. As more people take on unpaid caring roles, this issue is expected to grow in relevance for employers and policymakers alike.