Lost labour of unpaid carers costs carers and the economy up to £47.7bn, study finds
Millions of carers are locked out of paid work. This means, their households lose vital income, and the government loses tax income.
Across all working age carers, this is worth up to £47.7bn a year – equivalent to 1.7% of the UK’s entire GDP – which would further boost economic growth, contributing an additional £20.4bn in Gross Value Added across the economy from carers having a higher income to spend, a major new study has found.
Just getting those unpaid carers closest to the job market back into employment could boost the UK economy and household incomes by up to £16.9bn a year, leading to a further £7.2bn increase in GVA across the rest of the economy.
‘The hidden cost of unpaid care: The economic price of locking carers out of work' research was commissioned by national charity, Carers Trust, and funded by savings and retirement business Phoenix Group as part of its ‘Caring for Carers’ initiative. It shows the UK could reap huge financial benefits by giving carers more support to enter, and remain in, employment.
Of the nearly six million carers in the UK, almost half (2.7 million) are not in paid employment, researchers found. Of those, 524,000 are currently unemployed but could work with the right support.
If all of these 524,000 carers were able to get full-time work, their household income would rise by up to £10.1bn. This would also result in up to £2.8bn in reduced welfare payments and as much as £4bn in increased Income Tax and National Insurance contributions – a total gain of £16.9bn for the economy and carer household incomes.
Increased household income from unpaid carers being supported to work could also support household consumption and further economic growth in the wider economy. That includes up to £7.2bn in Gross Value Added to the economy and as much as £494m in increased VAT revenue.
For young carers, in particular, there is an economic cost of up to £1.1bn due to being out of the workforce. Their employment prospects are often blighted by the disruption caring causes to their education opportunities.
The State must invest in specialist employment support for carers. Carers need support from initiatives that understand the challenges and barriers they face. Supporting more carers into paid work would play a vital part in achieving Government ambitions.
This vital support would get more people into employment, reduce sky high poverty rates among carers, and help reduce spend on welfare. This needs and deserves investment to realise these benefits as well as help carers in their day to day lives.
The research was carried out by independent economics consultancy, Cambridge Econometrics, as part of a partnership between Carers Trust and Phoenix Group. The partnership has also launched a two-year employability programme at Camden Carers Centre in London, helping carers to boost their employment opportunities and skills.
A carer who has taken part in the programme said:
“I had to stop working in 2011 to become a full-time carer for my mum. Before that I had worked in customer service for 49 years.
"When my mum died last year, I decided that I wanted to get a part-time job to help get my brain active again as all I had known was caring for mum 24/7 and it had taken a massive toil on my mental health.
“Even just those initial steps to join the programme was nerve racking for me as I was really out of my comfort zone but the team at Camden Carers centre were so helpful and really patient especially when helping me write my job applications, which wasn’t easy as I have dyslexia.
"Since then, I have gone for two interviews and although I didn’t get either job the programme has given me my confidence back and will continue the job hunt.”
Previous Carers Trust research has shown around two-thirds of carers have had to cut back on working hours or give up employment completely because of the difficulty of balancing care with a career.
Carers Trust’s CEO, Kirsty McHugh, said:
“Up and down the country, millions of carers have been forced to give up paid work because of the overwhelming pressures of their caring role and the huge gaps in UK social care provision. This vital research shows for the first time the huge financial benefits of helping them back into paid work.
"The proceeds of that growth could be put towards finally fixing the creaking social care system which forces so many people into unpaid care in the first place.
“Employers can also play a huge part by offering flexible, carer-friendly working practices. Carers have so many skills to offer. It’s time they were given the opportunity to put them into action so everyone can benefit.”
Claire Hawkins, Director of Corporate Affairs & Brand at Phoenix Group, and Executive Sponsor of Phoenix Group’s colleague Carers Network, added:
“There are huge benefits both to the economy and individuals when carers do not need to choose between working or caring for a loved one. Falling out of work puts unpaid carers at great risk of financial vulnerability, particularly in later life, as they are not able to continue earning and building up their retirement savings.
“Our analysis found that nearly half (47%) of carers have zero private pension savings at age 60 to 65. Among those aged 60 to 65 who do have pension savings, carers have 17% less than the UK average, representing a shortfall of nearly £37,000*. This shows how important it is to enable carers who want to, to remain in work.
"At Phoenix Group we introduced a carers leave policy of 10-days paid leave in 2020 and have seen the real value of this policy as we continue to actively retain and recruit people with caring responsibilities. We urge other businesses, who can, to follow suit and offer paid carers leave.”