Carers are retiring with 80% of the UK average private pension income – £6,750 versus £8,500 – placing them among the most underpensioned and financially disadvantaged groups in the UK.
The average pension income for a carer has fallen to 49% of the national average, according to the 2025 ‘Underpensioned Report’, published by now:pensions in partnership with the Pensions Policy Institute (PPI).
This is down from 55% in 2020 highlighting a widening savings gap.
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The figures point to a pressing problem of carer poverty in retirement. Many are relying almost exclusively on the state pension.
The most recent Census in 2021 found there are 5.8 million unpaid carers in the UK and 1.7 million people in the UK are providing 50 or more hours of care per week.
Samantha Gould, head of campaigns at now:pensions and author of the report, 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.”
Carers are also less likely to be in paid work, with an employment rate of 61% compared to 76% of the general population.
They are also more likely to work part-time – particularly female carers, 38% of whom are in part-time roles, compared to just 29% of working women overall, the report found.
On average, carers earn £35,248 annually, below the population average of £38,740, but earnings differ significantly by sex. Male carers earn £46,681 on average, while female carers earn £28,176.
How could Britain boost carers’ pensions?
To help close the pension savings gap and boost pension savings among carers, now:pensions is calling on the government to introduce key policy reforms.
This includes introducing a family carer’s top-up, which would ensure pension contributions continue during periods of unpaid care.
Currently, people who take time out of their working lives to care for their family currently qualify for the state pension, but miss out on auto-enrolment.
Now:pensions’ family carer’s top up would see the government pay the equivalent of the employer’s contribution into carers’ private pensions, based on the National Living Wage.
This top up, estimated to be worth around £820 a year, could raise pension incomes by around 20% for people taking 10 years out of full-time work due to caring responsibilities, now:pensions calculated.
The report also calls for the removal of the £10,000 auto-enrolment earnings trigger – at which people are auto enrolled – to ensure more carers in part-time work are included in auto-enrolment.
While 10.8% of employees across the workforce are ineligible for automatic enrolment (they don’t meet the £10,000 earning trigger), that figure rises to 13% among carers — and 14.6% for women carers.
These figures highlight 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.
The problem is even more striking for those in receipt of Carer’s Allowance. According to Labour Force Survey data, just a quarter of carers receiving Carer’s Allowance are eligible for auto-enrolment, with as many as 75% missing out.
Helen Walker, chief executive of Carers UK, said: “We know from our work with unpaid carers that they work below their potential, taking less senior roles or lower paid jobs.
“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.
“Having a carer friendly employer can make the difference between carers staying in and leaving work.”
