Carers week marks an important time to celebrate the invaluable, but sadly often invisible, work carers do around the country all year round, often with little support, help or reward.

But it can’t simply be about raising awareness and showing thanks, we need to be supporting our carers, and making sure that we are picking up the strain where we can, to provide a system that cares for carers.

It is a sad fact that carers are often at a disadvantage, with research from Now Pensions and the Pensions Policy Institute revealing that this under-the-radar workforce not only earn less than the average, primarily because they don’t have time for paid employment, but their ability to save for their retirement is also severely limited.

According to the research, about half are in work (compared with three quarters of the rest of the population) and they earn between 16 per cent and 20 per cent less than the UK average, depending on their gender and work patterns.

With the current cost-of-living crisis, it is perhaps unsurprising that carers are facing unprecedented pressure on their finances, with analysis from Carers UK revealing that 16 per cent of unpaid carers are in debt as a result of their caring role and their financial situation, increasing to 40 per cent for unpaid carers in receipt of Carer’s Allowance.

In addition to this, the proportion of carers unable to afford their utility bills has more than doubled from 6 per cent in 2021 to 14 per cent in 2022, while 25 per cent of carers are cutting back on essentials like food or heating.

And this financial disadvantage carries through into retirement, as Now Pensions pointed out that many carers also miss out on the benefit of a workplace pension with their employer, with a "staggering" 81 per cent of carers locked out of auto-enrolment completely because they earn less than £10,000 a year.

Consequently, most carers will reach retirement age with private pension wealth of £29,800, just 37 per cent of the UK average of £80,690.

The carer pension gap is also exacerbating broader pension inequalities, as Royal London pensions expert, Clare Moffat, pointed out that figures from the Office for National Statistics (ONS) show that older female workers are twice as likely as their male counterparts to take on caring responsibilities.

Indeed, according to the 2021 Census, 59 per cent of unpaid carers are women and women are more likely to become carers and to provide more hours of unpaid care than men.

And the impact of the decision to pause work for caring responsibilities is clear, as analysis from Royal London showed that a woman who stops working at the age of 55 to care for a relative will have a £65,000 black hole in their pension pot compared with someone who continued working until 67, while a woman going part-time to care would see their pot reduced by £32,577.

“Caring responsibilities mean a million women below age 50 are not in employment while many more take on lower paid part-time jobs to allow them to juggle both," Moffat stated.

“Supporting carers throughout their working lives is now key to closing the gap in gender pension outcomes."

But there is hope on the horizon, as organisations are taking action to better support carers.

Phoenix Group, for instance, has used Carers Week as a chance to launch its new Caring For Carers initiative, which will see it linking with charities across the UK that focus on caring, including a new partnership with Carers UK.

Commenting on the partnership, Carers UK chief executive, Helen Walker, said: "Caring for older, disabled or ill relatives or friends is an issue that affects millions of people every day, in every part of the UK, in households, places of work and in local communities.

“Most of us will provide care at some point in our lives and it can have a negative impact on our ability to work, our finances, our health and wellbeing and relationships. Yet caring can come as a shock that is often not planned for.

"With our ageing population this will become increasingly important, not just for carers, but for employers, the economy and society as a whole. That’s what makes this partnership really important and will help to deliver our mission to make life better for carers.”

Phoenix Group also highlighted the changes that employers can make to support colleagues that may be carers, encouraging other businesses to follow suit.

This includes offering flexible working to suit caring and family responsibilities, a carers network where colleague who are caring for someone are able to discuss problems, and show solidarity for the role they are in, and access to KareHeroes, a specialist support and concierge service designed to help with practical support.

Royal London pensions expert, Clare Moffat, also suggested that "employers can do their bit by being more adaptable with working arrangements and shared parental leave to give women the flexibility to remain in the workplace".

However, Moffat argued that "this isn’t just the bosses’ problem to solve", instead suggesting that "couples urgently need to take greater responsibility for their own financial well-being and look at ways they can plan with confidence for retirement together".

“Contributing to a spouse’s pension and ensuring you’re both maximising the state pension entitlement are among the steps you can take to ensure you’re retiring together in the style that you deserve," she said.

But broader reforms may still be needed, it is important that we have a pension system in place that works for carers, rather than against them.

Auto-enrolment reforms are particularly important in this sense, as Now Pensions reiterated its calls for the government to expand the scope of pension saving to cover more savers, including carers.

In particular, Now Pensions said that removing the £10,000 qualifying earnings trigger would get hundreds of thousands more people saving through auto enrolment in a workplace pension, while pension saving from the first £1 could increase pension wealth by nearly 40 per cent.

In addition to this, Now Pensions suggested that a family carer top-up could be another solution, estimating that a family carer top-up would help about 3 million women and 300,000 men top up their pension savings after taking time out of work to care for children and elderly relatives.

According to Now Pensions’ estimates, the top-up would be worth about £820 per year and boost pension outcomes by about 20 per cent for people who take 10 years out of work due to caring responsibilities before returning to the workforce full-time.

Anyone can become a carer, with research from Pension Bee revealing that two-in-three people are likely to take time out to provide unpaid care at some point during their working life, and the system needs to be ready to support this.

While it is of course important to acknowledge the sacrifices carers make, simply raising awareness around the work done by carers, while leaving them without the support they need, just isn't good enough anymore.

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