Millions of unpaid carers are at risk of lower retirement incomes due to gaps in pension savings, a government-commissioned report has warned.
The Second Pensions Commission found carers typically build up significantly less private pension wealth because of reduced or interrupted paid work.
While State Pension credits protect basic entitlement, they do not replace lost employer contributions or long-term investment growth.
Women are disproportionately affected, reflecting their greater likelihood of taking on unpaid caring roles. The report also found low uptake of Carer’s Credit, with fewer than 10,000 claims made in 2023-24.
Adults aged 55 to 64 are most likely to become informal carers, often leaving work earlier than planned. The report outlines this shortens National Insurance records and increases reliance on the State Pension in later life.
It also highlights a persistent gender gap in retirement savings, with median private pension wealth among women 48% lower than men. Caring responsibilities are cited as a key factor.
With around half of working-age adults not contributing to a pension in a typical month, the commission has called for reforms to better support those with ‘non-linear’ working lives, including carers and disabled people.
Helen Walker, chief executive of Carers UK, said: ‘Unpaid carers who spend years looking after others often pay the price in their own retirement. We therefore welcome the Pension Commission’s recognition of the real challenges they face in saving for a secure and adequate retirement income.’
‘There are practical steps that could make a real difference now,’ she continued.
‘Improving awareness and access to the Carer Addition within Pension Credit could provide immediate support for older carers facing financial hardship. 65,000 carers are likely to be eligible for Pension Credit but are not receiving it. An additional payment for unpaid carers of State Pension age of £36.60 a week could lift 20,000 carers out of deep poverty, at an estimated annual cost of £300 million per year.’
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