Two-in-three people are likely to take time out to provide unpaid care at some point during their working life, and could consequently lose out on thousands of pounds in retirement, according to PensionBee's The Carer’s Pension Gap report.

The report identified five key moments when people are most likely to need to take time out of work to provide care. These were taking care of children; looking after parents; helping a partner; caring for grandparents; and guarding grandchildren.

For someone who needs to provide unpaid care at all five key life moments, PensionBee estimated their pension pot could be almost £30,000 less at retirement.

This "carer’s pension gap" is the difference between a pot size of £222,000 at age 67 and one worth £193,000 at the same age.

The provider based the "carer’s pension gap" equation on an assumption that someone takes two years out of paid work to look after children, plus an extra year each (four in total) for caring for grandparents, parents, grandchildren and a partner at other critical moments through working life.

After interviewing over 1,400 people, PensionBee found that 67 per cent of people have had to take time out of paid work to care for a loved one, unpaid.

The main bulk of care (48 per cent) is for children, followed by parents (30 per cent). Just 5 per cent reported having to look after grandchildren, although this rises to 19 per cent of carers aged between 55 and 64.

Three of the key care moments are most likely to occur in someone’s late 50s or early 60s, in the build-up to retirement.

"Millions of workers; both male and female, old and young, are filling the gaps created by a
lack of social care support, at great personal cost," said PensionBee's director of public affairs, Becky O’Connor.

"The chance of this affecting any one of us throughout our working lives is high. The consequences go beyond pensions and security in later life, affecting people’s careers, personal lives, and also the UK economy.

"It’s not a niche problem — nor is it necessarily gendered — although currently, women are more likely to face the consequences of the biggest gap: the childcare gap. Besides the pension gap caused by childcare, it’s clear there is a strong case to give attention to the impact of the multiple care moments faced by people in their late fifties and early sixties.

O'Connor added that as the government looks to address the labour shortage, particularly among older people who have left the workforce early, it needs to find a solution that prevents people from missing out on key working years to avoid a pension shortfall in retirement.

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