Gen X carers 'considerably disadvantaged' in retirement planning

Generation Xers with caring responsibilities are "considerably disadvantaged" when it comes to pension saving, according to research from the International Longevity Centre (ILC), with more than half (56 per cent) worried about their lifestyle in retirement.

The research, supported by Phoenix Group, also found that over 67 per cent would like to save more money but struggle to do so, with 24 per cent attributing this to insecure earnings and fluctuating outgoings, whilst 56 per cent simply cannot afford to save more.

Furthermore, of those who cannot afford to save more, 25 per cent stated that this was due to their care responsibilities limiting their ability to work, while 7 per cent were paying to support an unwell friend or relative, which affects their ability to save.

Nearly a third (32 per cent) of Gen X carers also stated that they are too overwhelmed and distracted by other priorities to think about their retirement plans, with this figure increasing to 41 per cent for those who have multiple caring opportunities, such as for both children and an adult.

The research suggested that this is taking a toll on carers, as more than half (51 per cent) of Gen X carers are in poor health themselves, compared to 34 per cent of non-carers, with 17 per cent stating that they can’t afford to save more because of their poor health limiting work.

The 'stark findings' have raised concerns over the financial wellbeing for the around 1.7 million Gen X carers, prompting calls for policymakers to tackle the wider socio-economic factors reducing carer’s ability to work and save for retirement.

Indeed, the report revealed that only 48 per cent of Gen X carers are employed full-time, compared to 61 per cent of Gen Xers with no care responsibilities, and 29 per cent are not employed at all, compared to 22 per cent of non-carers in the same age group.

Phoenix Group UK & Europe savings and retirement CEO, Andy Curran, argued that it is a "travesty" that carers should be penalised for looking after loved ones, emphasising that this is "something Phoenix is committed to fighting".

He stated: “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, 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.”

ILC research fellow and report author, Sophia Dimitriadis, added: “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 per cent 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."

Dimitriadis stressed that the pandemic has also demonstrated that many roles can be worked flexibly, highlighting this as a "significant opportunity" to shift towards more "flexible by default" roles, allowing people to flex work around 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," she emphasised.

“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.”

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