• Gen X carers struggle to balance work and caring responsibilities, impacting finances and savings
• More than half (56%) are worried about their lifestyle in retirement
• A third (32%) are too overwhelmed or distracted to plan for retirement

Generation Xers (those born between 1965 and 1980) with caring responsibilities are considerably disadvantaged when it comes to retirement finances, research from the International Longevity Centre (ILC) and supported by Phoenix Group reveals ahead of Carers Week, 7-13 June 2021.

The future financial wellbeing of many of the 1.7 million Gen Xers who are carers is being severely hampered as caring responsibilities can limit their ability to work and in turn save, while also contributing to poorer health compared to non-carers.

The stark findings are uncovered in the ILC’s Slipping between the cracks report, supported by Phoenix Group, the UK’s largest long-term savings and retirement business, which calls on policymakers to tackle the wider socio-economic factors reducing carers’ ability to work and save for retirement.

Employment impact

Caring responsibilities have a significant knock-on effect on the earnings and working lives of many Gen Xers. One in six (18%) of Gen X carers is not confident at all they will be able to work for as long as needed as a result of their caring responsibilities, which is likely to impact their income.

Worryingly, even after Gen Xers’ caring responsibilities have ended:

• Less than half (43%) of current care providers are employed full-time (compared to 61% of Gen Xers without current or previous care responsibilities)
• 36% are not employed at all (compared to 22% of Gen Xers with no care responsibilities).

Financial and retirement worries

The report by ILC, the UK’s specialist think tank on the impact of longevity on society, finds that more than half (56%) of Gen X carers are worried about their lifestyle in retirement. Two thirds (67%) would like to save more money but struggle to do so, with 56% saying they simply can’t put any more away, while 24% struggle due to insecure earnings and fluctuating outgoings. Of those who cannot afford to save more:

• 25% say their care responsibilities limit their ability to work
• 7% are paying to support an unwell friend or relative which affects their ability to save.

However, a third of Gen X carers (32%) are too overwhelmed and distracted by other priorities to even think about retirement plans, rising to 41% of those who have multiple caring responsibilities (caring for both children and an adult).

Gen X carers’ own health concerns

More than half (51%) of Gen X carers are in poor health themselves – compared to just over a third (34%) of non-carers. This is indicative of the toll that caring takes and 17% say they can’t afford to save more money because poor health limits their ability to work. Many carers therefore find themselves in a vicious circle where their retirement prospects are disadvantaged directly by care-giving, but also by the indirect effect this has on their health.

Andy Curran, CEO Savings & Retirement, UK & Europe at Phoenix Group, said:

“It’s a travesty that carers should be penalised for looking after their loved ones, and something Phoenix is committed to fighting. Many Gen X carers are already facing significant barriers to saving and if their employment prospects are limited as a result of their caring responsibilities, this will compound the impact on their financial futures. With an estimated 600 people with caring responsibilities leaving the workforce each day (1), it’s our duty to help ensure they can continue to earn an income wherever possible.

“Carers will play an ever more important role in our society as life expectancies increase and any one of us could have a caring commitment at some point in our working lives. It’s something all employers need to recognise. At Phoenix we have recently upped our paid Carers Leave provision to ten days to support our working carers, alongside an employee assistance programme, and an extremely active colleague Carers Network. Offering even greater flexibility and paid carers’ leave will enable employers to retain carers in their organisations while giving them the breathing space they need, and the right to look after loved ones without extra worries about their savings or their career.”

Sophia Dimitriadis, Research Fellow at ILC and report author adds:

“While unpaid carers provide a huge service to our society and save the NHS over a hundred billion pounds each year – they are unfairly penalised for this. They disproportionately risk facing financial hardship in retirement – with 35% of Gen X carers especially at risk – mainly due to the impact of caring responsibilities on their ability to work and save for retirement. But it doesn’t have to be this way – most carers want to work.

“Extending existing legislation around parental leave to offer ten days of statutory paid leave for carers could make a huge difference. The COVID-19 pandemic has also demonstrated that many more roles can be worked flexibly. This provides a significant opportunity to shift towards roles being ‘flexible by default’ – to enable more people to flex their work around their caring responsibilities. This could be a game changer; the number one change that employees say could make a difference to their ability to work longer is greater flexibility. As the demand for informal carers is expected to soar to meet the needs of our ageing population, policy makers will urgently need to support the needs of carers – including those that want to work.”

Contact

Notes

ILC’s Slipping thorugh the cracks report can be found here. The findings are ILC calculations based on nationally representative YouGov survey responses of 6035 UK adults aged 40-55 (collected online between 13-24 November 2020). All references and methods are available in the full report.

References

(1) According to Carers UK research from February 2019 [accessed on 24 May 2021]

About Phoenix Group

Phoenix Group is the UK’s largest long-term savings and retirement business with c.14 million customers and £338 billion of assets under administration across both our Heritage and Open businesses.

Our Heritage business, where we are the market-leader, is focused on the safe and efficient management of insurance policies. The Heritage business comprises products that are no longer actively marketed to customers, and where we have stepped in as the custodian of these policies. We have built this business through the consolidation of over 100 legacy insurance brands.

Our Open business comprises products that are actively marketed to new and existing customers and has five separate business units. Our Workplace pensions and Customer Savings & Investments (“CS&I”) units operate under the Standard Life brand and manufacture long-term savings and retirement products to support people saving for their future.

The Retirement Solutions unit within Open includes both vesting annuities and our Bulk Purchase Annuity (“BPA”) business, where we acquire annuities and deliver the financial stability required to secure pensions currently provided by corporates.

The Open business comprises our market leading brand – “SunLife” – which sells a range of financial products specifically for the over 50s market and our European business unit which spans Ireland, Germany and the International Bond segment in the UK and operates under the Standard Life brand.