Who cares for the carers? Shocking pension gap leaves millions behind
As Scotland marks Carers Week, a stark new report reveals just how much unpaid carers are being left behind when it comes to saving for retirement — raising urgent calls for reform to close the growing pension gap.
According to the 2025 Underpensioned Report, published by workplace pension provider now:pensions in collaboration with the Pensions Policy Institute (PPI), carers are retiring with less than half the private pension income of the average UK worker.
The report highlights that the average private pension income for carers is now just 49% of the national average — down from 55% in 2020. This widening gap paints a bleak picture for the financial future of millions providing unpaid care.
Carers More Likely to Miss Out
One of the core issues is employment. Carers are significantly less likely to be in paid work — just 61% are employed, compared to 76% of the general workforce. For female carers, the disparity is even more pronounced: 38% work part-time, compared to just 29% of working women overall.
Lower earnings and part-time roles mean many carers miss the threshold for automatic enrolment into a workplace pension. While 10.8% of the general workforce fall below the £10,000 earnings trigger for auto-enrolment, 13% of carers — and nearly 15% of women carers — are excluded.
The figures are even starker for those in receipt of Carer’s Allowance. According to Labour Force Survey data, only a quarter of these carers are eligible for auto-enrolment, leaving three in four with no access to workplace pension savings at all.
Pay Gap Adds to Inequality
The average income for carers stands at £35,248, below the national average of £38,740. But when broken down by gender, the gap widens: male carers earn £46,681 on average, while female carers take home just £28,176.
Samantha Gould, Head of PR and Campaigns at now:pensions and author of the report, said the numbers are a wake-up call: “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.”
A Call for Reform
To tackle the disparity, now:pensions is calling for a series of policy reforms, including:
- A family carer’s top-up, ensuring pension contributions continue during periods of unpaid care.
- Removal of the £10,000 earnings threshold for automatic pension enrolment.
- Scrapping the lower earnings limit, so that every pound earned counts towards pension savings.
Carers UK: 'Time to Act'
Helen Walker, Chief Executive of Carers UK, described the findings as deeply concerning: "we know from our work with unpaid carers that they often work below their potential, take less senior roles or move into lower-paid jobs. Working part-time or leaving work completely can be catastrophic for their finances in the short term — and even worse for their pensions in the long run."
Walker urged employers to adopt carer-friendly policies, such as flexible working, paid carer’s leave, and better support systems to help carers remain in the workforce: “with longer working lives and an ageing population, supporting unpaid carers in the workplace is becoming ever more important. Carers Week is the perfect moment to show that we care about equality.”
Millions at Risk
The 2021 Census recorded 5.8 million unpaid carers in the UK, with 1.7 million providing more than 50 hours of care each week. While some progress has been made in employment rates since 2022, the pensions gap continues to grow — threatening the future financial security of a vital but too often invisible workforce.
As calls grow louder for pension reform, one message is clear: carers need more than gratitude — they need policy changes that value their unpaid work and safeguard their futures.