Retirement specialist, Just Group, has released research into the lives of people in the sandwich generation providing care for an elderly relative, finding a “significant” loss of income for carers carrying out these responsibilities.
Just Group surveyed 1,000 UK adults aged 45-75 taking care of an elderly relative, finding that respondents have either stopped working altogether (9%) or reduced their working hours (28%) to provide support.
These figures rise among those who are the sole carer for an elderly dependant to 14% and 33%, respectively.
Loss of income
The average monthly loss of income for carers who have reduced their working hours came in at £522, equating to £6,268 per year, with 14% of carers stating their monthly income reduced by more than £1,000 a month due to providing care.
Out-of-pocket expenses from caring responsibilities, which ranges from travel costs to paying for everyday shopping, added another layer of pressure on carers' finances.
These "hidden costs" have added up to an average of £100 per month, Just said, with 11% spending more than £200 every month.
Emma Walker, director, Just Group, said: "We're familiar with the physical and mental toll the ‘sandwich generation' face as they are squeezed between work, supporting children and caring for ageing parents. What isn't thought about so often is the financial and professional price this generation pay for caring.
"Many scale back their working hours and some leave the workforce altogether to meet their caring commitments – with the knock-on effect that, on average, their income is reduced by hundreds of pounds every month."
Walker said this often coincides with the time when people reach their peak-earning potential, at which point many people have planned to use spare income to build up pension pots and pay off a mortgage.
"Of course, many carers are glad to be able to take care of their family and don't count the cost. But it's important that people don't overlook the impact stepping away from work can have on their financial future," Walker said.
MoneySuperMarket also released research into this area last year, it found that adults caring for children and ageing relatives provide £16,773 worth of unpaid care per person each year.
It discussed how the shortfall in unpaid work, should a carer pass away, could be more than £160,700 over 10 years, without including costs including bills, mortgages or children's savings.
According to MoneySuperMarket's Life Insurance Index, 20% of UK adults have life insurance, which it said was a stable and accessible form of financial security for those with carer responsibilities.
According to the Office for National Statistics (ONS), approximately 1.4 million UK adults fit into this sandwich generation, with the total cost in unpaid care totalling £24 billion each year.
Around 45% of people in this generation are struggling financially or just getting by, the ONS reported.
Kara Gammell, life insurance expert, MoneySuperMarket, said at the time: "Most people think about insuring their mortgage if the worst happens but very few consider the financial impact of losing the work they provide at home."
