With the older generation living longer and continued debate about the funding of adult social care in the UK, many adult children or grandchildren have taken the decision to leave the workforce to become full-time carers, with many having to do this unpaid.
Carers UK says that 6,000 people become carers everyday in the UK, and research from Fidelity International as part of its Modern Life Report found it can cost on average £5,545 a year to those caring for relatives. The estimated cost of caring for an elderly relative is based on the impact being a carer can have on someone’s finances, both in lost earnings and also the money need to adapt the relative’s home or additional travel costs.
While it’s hard to plan for situations like becoming an unpaid carer, it’s important to have access to the information needed for people to properly plan their finances should this happen.
Research from Fidelity’s Modern Life Report found:
The cost of care
- Caring for an elderly relative costs on average £5,545
- The cost of funding care is currently higher for millennials than any other age group, as they say they have spent an average of £6,183
- Nearly three in 10 (29%) adults in the UK have needed to care for elderly relatives
- Of this, a fifth (20%) have taken time out of work to do so, 14% have cut their hours at work and one in ten (10%) have quit their job altogether to provide the necessary level of care for an elderly relative
- On average it costs £8,138 for men and £3,187 for women in money spent on caring for an elderly relative or in lost earnings
- 25% of those in their 70s don’t know how they will meet care costs
- 24% believe they will rely on state provision, while 23% simply don’t know
- Over a quarter (26%) of those in their 50s haven’t thought how they will pay for long-term care. 20% of those in their 60s, and 25% of those in their 70s don’t know how they will meet future care costs
In addition, Fidelity’s Financial Power of Women research found that:
- 16% of women are currently acting as an unpaid carer for a family member
- A further 14% expect that they or their partner will become an unpaid carer in the future
Emma-Lou Montgomery, associate director for personal investing at Fidelity International, said: “When it comes to our wellbeing, we aren’t always in control of what happens. We are living longer than ever before, and while many of us will spend more years in good health, some of us may also face periods of poor health. Therefore, it’s important to put money aside to cover any care costs so that loved ones who you may come to rely on don’t have to lose out financially.
“For those who expect to be, or are currently acting as, unpaid carers, it is vital that they are still preparing for their own future, particularly women who remain the most likely to become unpaid carers and who already face a gap in pension savings. Putting away extra money each month when you are young will help to ensure you don’t fall behind if you need to take time off for illness or to care for a loved one.”