London, Thursday 21 November 2024: Today marks Carer’s Rights Day, focused on highlighting the challenges faced by carers. However, the Chancellor’s recent decision to increase employers’ National Insurance contributions through a rate increase, together with the lowering of the earnings threshold at which National Insurance is payable, could exacerbate these challenges.
Lisa Picardo, Chief Business Officer UK at PensionBee commented: “Changes to employers’ National Insurance Contributions could disproportionately affect carers, who are already navigating the challenges of balancing work with caregiving responsibilities. The increased cost burden on employers may lead to a decline in part-time job opportunities which many carers depend on to navigate their dual responsibilities. Without flexible working options, carers risk being excluded from the workforce entirely.
This issue is especially significant for women, who are more likely to take on caregiving roles and work part-time. The loss of these opportunities not only limits their immediate earning potential but also has long-term consequences, exacerbating the gender pay and pension gaps. According to research from our Carer’s Pension Gap Report, each year spent out of the workforce for unpaid caregiving reduces a pension pot by an estimated £5,000, and even working part-time leaves carers with a pot approximately £2,000 lower at retirement.1 This creates a ripple effect, threatening their financial security and independence later in life.
While the planned increase to the earnings limit for unpaid carers in April 2025 is a welcome step, policymakers must ensure that carers are supported, not penalised, for their essential contributions to society.
Safeguards should be in place to protect part-time work opportunities and the vital role carers play in our communities should be reflected in policies that uphold their financial stability and promote gender equality in the workforce and beyond.”
