Parents of disabled children could have £138,000[1] less in their pensions if their caring responsibilities prevent them from returning to work, according to analysis from leading workplace pension provider, People’s Partnership[2].
The provider of The People’s Pension to 6.7 million people across the UK calculated the impact of caring for a child with a disability on parents’ ability to save for retirement. It found parents of disabled children who return to work part-time are £89,000[3] worse off than parents who are able to continue working, while those who take a career break to care for a disabled child and receive a pay cut when they return are £55,000[4] worse off in retirement compared to a normal working parent.
Meanwhile, further research from the not-for-profit company found that just under two thirds (64%) of parents of disabled children are worried about their future finances, according to new research from People’s Partnership[5].
In a survey of more than 2,000 adults, it found more than a quarter (27%) of parents in the UK have at least one child with a long-term health condition, impairment or illness – impacting millions of families across the UK.
For those parents:
Over half 53% of non-retired parents are not confident that they’ll have enough pension savings to live the lifestyle they want in retirement.
Just one in ten (11%) parents of disabled children feel adequately supported by the Government or charities in caring for their children.
While the Carers’ Leave Act, which was became law in April, introduced five days unpaid carers’ leave, People’s Partnership is calling on employers to create the flexibility and workplace culture that allows parents to balance caring and working. It is also calling on the pensions industry to implement better access to financial planning resources and more robust support systems to help close the pension gap for parents with disabled children.
People’s Partnership has a Financial Wellbeing Hub[6] , which includes information for carers and works with a specialist organisation to help people, including carers, get back into work after a period of time away. It is calling on employers to implement flexible working policies, internal support groups and leave policies that are similar to maternity and paternity policies, but for parents of disabled children, to better support carers in their careers.
Nicola Sinclair, Head of Responsible Business at People’s Partnership, said:
“There is a dire need for more comprehensive support structures for parents caring for children with long-term health conditions. Better access to financial planning resources and robust support systems would help relieve some pressure on this forgotten group of people, but further action is needed if we are to avoid another pension gap widening further.
“While flexible working policies offer some relief, tailored support, rather than box ticking, is crucial for long-term financial security and improved retirement outcomes. It’s vital that employers who don’t follow the new flexible working laws are held accountable. We need to develop resources tailored to these employees who care for a disabled child, with a focus on combating stigma and creating more inclusive workplaces that allow them to remain in and return to employment. Our research shows that some parents of disabled children are facing poverty in retirement unless things change dramatically.”
People’s Partnership undertook additional qualitative research and, through interviews with parents of children with disabilities, who were able to work, it found that reduced earnings through lack of career progression, having to take a lower paid part-time job, and often only having one household income; significantly hampered parent’s ability to save for their retirement[7]. However, often this is not the case, and parents are unable to return to work due to the demand of care.
The link to the report, which was commissioned and overseen by Fern Healey, Executive Business Partner at People’s Partnership, as part of her sponsored Master of Business (MBA) development. The report can be found here: Pension inequality – parents of disabled children | People’s Partnership (peoplespartnership.co.uk)[8]
Richard Kramer, Chief Executive of the national disability charity, Sense, said:
“The research highlights the stark reality for parents of disabled children, who face significant financial hardships due to their caregiving responsibilities.
“At Sense, we see firsthand the challenges these families face. Very few parents, who are struggling day to day, will have the luxury of thinking about retirement. So it is little surprise that they’re at such a disadvantage when it comes to saving.
“Local and national government must commit long-term resource and funding to support families. And employers must do their bit too – creating more supportive environments with improved flexible working policies.
“We need to show that we value these incredible individuals in our communities.”
People’s Partnership based this calculation on the assumption that carers go part time to four days a week.
People’s Partnership calculated this figure based on the assumption that carers would take a 20% pay cut when returning to work after a period of time not working.
All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 2,126 adults, of whom, 315 were parents with children experiencing long-term health conditions, impairments or illnesses. Fieldwork was undertaken between 6th – 7th November 2023. The survey was carried out online. The figures have been weighted and are representative of all GB adults (aged 18+).
[Insert link to Financial Hub]
The qualitative research was conducted with Jigsaw Research during Autumn 2023, which comprised a mix of both in-depth interviews and a focus group with eight parents of children with a disability.
The link to the research findings reports, which were commissioned and overseen by Fern Healey, Executive Business Partner at People’s Partnership, can be found here: https://peoplespartnership.co.uk/media-centre/research/pension-inequality-parents-of-disabled-children/
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