The average pension income for a carer has fallen to 49 per cent of the national average, research by Now Pensions has revealed, down from 55 per cent in 2020 highlighting a widening savings gap.

The report, the 2025 Underpensioned Report produced in partnership with the Pensions Policy Institute (PPI), showed that carers remain among the most financially disadvantaged groups in the UK when it comes to retirement savings.

In light of Carers Week, the research found that carers are retiring with 80 per cent of the UK average private pension income (£6,750 vs £8,500), placing them among the most under-pensioned groups in the UK.

Additionally, carers are also less likely to be in paid work, with an employment rate of 61 per cent compared to 76 per cent of the general population.

They are also more likely to work part-time - particularly female carers, 38 per cent of whom are in part-time roles, compared to just 29 per cent of working women overall.

To address these shortfalls, Now Pensions has proposed several key policy reforms including removing the £10,000 auto-enrolment (AE) earnings trigger to ensure more carers in part-time work are included and scrapping the lower earnings limit on pension contributions to make every pound earned count towards pension savings.

These policy reforms are included in the Private Members' Bill, which industry stakeholders have long advocated for.

Many hope the upcoming second phase of the Pensions Review, set to be launched in the 'coming months,' as confirmed by Chancellor, Rachel Reeves, will address these issues.

The other policy reform that Now Pensions called for was the introduction of a family carer’s top-up, which would ensure pension contributions continue during periods of unpaid care.

Research also showed that on average, carers earn £35,248 annually, £3,492 below the population average of £38,740.

However, earnings differ significantly by gender with male carers earning £46,681 on average, while female carers earn £28,176.

While 10.8 per cent of employees across the workforce are ineligible for AE due to not meeting the £10,000 earning trigger, that figure rises to 13 per cent among carers and 14.6 per cent for women carers.

Now Pensions emphasised that these figures show how unpaid caring responsibilities can have a lasting impact on future financial security and as a result, many miss out entirely on saving into a pension through their job.

It stated that the issue is even more “striking” for recipients of Carer’s Allowance, as Labour Force Survey data revealed that only a quarter of these carers qualify for auto-enrolment, leaving a “staggering” 75 per cent excluded.

Now Pensions head of PR and campaigns and author of the report, Samantha Gould, said: “Carers provide essential support that many depend on every day, yet they remain systemically disadvantaged in their ability to save for later life.

“We urgently need pension reform that acknowledges and supports the vital unpaid work that carers do to help provide greater financial security in retirement.”

Adding to this, Carers UK chief executive, Helen Walker, said it is “really worrying” to see the employment rate of unpaid carers dropping.

“Working part-time or falling out of work completely can be catastrophic for unpaid carers' finances in the short term and can leave a lasting negative imprint on their pensions in the future,” she continued.

"Having a carer-friendly employer can make the difference between carers staying in and leaving work. 

“With longer working lives and an ageing population, supporting unpaid carers in the workplace is becoming ever more important." 

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