London, 17 September 2026: The recent Carer’s Allowance scandal has put the financial pressures facing unpaid carers under the spotlight, but an even bigger cost can come later, with multiple periods of unpaid care potentially leaving people £30,000 worse off in retirement.
The scandal has centred on thousands of unpaid carers unexpectedly being forced to repay thousands of pounds of state benefits after breaching the Carer's Allowance earnings limit, sometimes by only a small amount due to the rigid ‘cliff edge’ rule. Concerns have also been raised about delays in identifying overpayments, allowing debts to build-up for years before carers were notified, and the handling of repayments. The Government has committed to reviewing affected cases.
PensionBee is calling for greater attention to the long-term overall impact caring can have on retirement outcomes, with its Carer’s Gap research showing that every year spent out of paid work providing care can reduce a person's retirement savings by around £5,000.
The illustrative analysis suggests that someone who experiences multiple periods of unpaid caring throughout their working life could retire with around £30,000 less in their pension than someone who never leaves the workforce to provide care. PensionBee estimates that two-thirds of people will need to provide unpaid care at some point during their lives, making the issue one that affects millions of households across the UK.
The issue has also been highlighted by the Second Pensions Commission, which has identified unpaid carers as facing heightened risks of undersaving for retirement. Its final report, expected in 2027, is due to set out recommendations to the Government on how to address these structural vulnerabilities.
Against a backdrop of growing scrutiny of support available to carers, PensionBee is urging policymakers to consider the long-term retirement consequences of unpaid care.
Lisa Picardo, Chief Business Officer UK at PensionBee, said: “For many unpaid carers, the financial impact doesn't end when their caring responsibilities do. Years spent reducing paid hours, turning down promotions or leaving the workforce altogether can translate into significantly lower pension savings and greater retirement insecurity.
“While the focus has rightly been on the immediate consequences of the Carer's Allowance scandal, there is also a longer-term issue that receives far less attention which is the retirement penalty many carers pay for supporting their families. Without action, millions risk reaching later life with pension savings that fail to reflect the vital role they have played in society.”
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