New research from the Joseph Rowntree Foundation for the first time calculates the ‘caring penalty’, or the amount lost in earnings by those who take up caring for a loved one.
Forced to cut down on hours worked or leave work altogether, unpaid carers are being pushed into poverty while providing invaluable care. The longer people undertake unpaid care the greater the impact on their finances, as they give up opportunities for wage growth and career progression.
If unpaid carers do give up work, the low level of income they receive from Carer’s Allowance doesn’t protect them from poverty while also disincentivising them to return to work.
The research findings include:
• Unpaid carers experience an average pay penalty of £487 per month, or nearly £6,000 per year, rising to £744 per month or nearly £9,000 per year after six years of providing unpaid care
• Five years after starting care work, over 30% of those who were in paid work before providing 20 or more hours of unpaid care per week are no longer in paid work
• Most unpaid carers who leave work don’t see their incomes replaced, over 25% of carers who had to give up work at the same time as beginning unpaid care work do not receive a pension, Carers Allowance or Universal Credit
o For over two-thirds of these carers, these benefits replace less than half of their previous earnings
JRF is calling for the contributions of our unpaid carers to be valued through Statutory Carer Pay:
• Carers would be eligible for 39 weeks of paid leave for one year, with the ability to take this leave flexibly
• The policy would be funded by the Government and, at a minimum, paid at the same level as Statutory Maternity Pay
• Around 65,000 carers would be expected to take up the policy each year and the majority would stay in work
The Carer’s Leave Act 2023 will give unpaid carers one week of unpaid leave per year. However, the Act falls well short of supporting carers to balance paid work with the vital work of caring. Unpaid carers will often need more than one week of leave per year to support their loved ones.
Going without pay to care also drives financial hardship for carers on low incomes. Unpaid leave doesn’t reflect the importance of caring in our society and fails to give carers the financial recognition for the work they do.
The report also examines the pay penalty parents face and sets out the need for a broader redesign of the relationship between care and work, including more generous paternity leave and a strengthened right to flexible working.
Abby Jitendra, Principal Policy Adviser at JRF, says:
“It’s not right that unpaid carers on low incomes are losing out on thousands of pounds and being pushed into poverty as they can no longer work while providing much needed care that benefits us all.
“The Carer’s Leave Act will give unpaid carers one week of unpaid leave a year, but unpaid, short-term leave will not prevent the financial hit people face or stop people from dropping out of work when care needs intensify.
“We need to show we value our unpaid carers and the work they do by introducing paid carer’s leave, in line with maternity leave.
“This policy would make a practical difference, giving people the security to choose to care for their loved ones themselves without falling into poverty while supporting those who need care most in our society.”