Do you care? You probably do, but what I am specifically talking about here is whether you, or someone you know, is one of the UK’s millions of unpaid carers who look after a loved one who is elderly, disabled or seriously ill.
One survey launched by the charity Carers UK today, which also happens to be National Carers Day, shows that this army of family and friends has provided an incredible £135 billion of care since the start of the pandemic in March. That’s £530 million of care every day. And the charity says this overall figure is almost certainly an underestimation of the real cost.
The pandemic has undoubtedly placed an exceptionally large burden on these carers, with national and regional lockdowns impacting on the usual care services available, but, with an ageing population, the need for care and people to provide it, is only going to grow.
Women are particularly vulnerable here. As are young carers who may yet to have got started on their career path. These are the two groups that tend to shoulder the burden of care for a close family member. And as this care is provided for free, it inevitably eats into the time they could otherwise be earning and looking after their own financial health by building up their savings and paying into their pension.
Unpaid care, of course, even impacts on their state pension entitlement, so women and young carers need to bear this in mind. As indeed do all carers, who give up their time (often many hours a week) to care for someone.
You can help too, if your spouse or partner is sacrificing their own financial future you can help them out by paying contributions into a pension for them, even if they are not earning a penny. Everyone can save £2,880 a year into a pension plan, even if they are a non-taxpayer, have no earnings or earn less than £3,600 a year. That £2,880 is then topped up, thanks to tax relief, meaning you can help fund their future savings to the tune of £3,600 a year.
Care is actually a two-part issue though. As well as the impact on carers’ own finances and financial health, there is also of course the burning issue of how to fund your own care, should you need it and need to pay for it. Because not everyone has someone who can step in and care for them in place of a paid carer. And nor can we all guarantee our care needs won’t require specialist paid care.
However, the longer we live, the higher the likelihood becomes that we will, one day, need care of one sort or another. According to equity release company Key, women - perhaps because of the burden of care tending to fall on them - tend to be far more aware of the potential to need care, and the possible cost.
In a recent survey it carried out, it found that 48% of older homeowners are worried about falling ill and having to pay for care, up from 39% a year earlier. Nearly one in four, some 24% are worried about having to sell their home, up from 18% last year. Women are most affected by this concern, with 26% of them aware and concerned, compared with 21% of the men surveyed.
The funding of care is complex and the costs vary depending on the type of care and, of course, the length of time a person needs care for. That is why preparing for it financially can feel like an impossible task. Much like pension planning though, the best approach is to start as early as possible to build up the biggest savings pot you possibly can.
While different discussions rage on about whether a mandatory approach should be initiated by the government, in much the same way auto-enrolment has boosted people’s pension savings, the best approach is to take the matter into your own hands and start saving now with a mind on your future potential care needs.
Important information: The value of investments and the income from them, can go down as well as up, so you may get back less than you invest. Investors should note that the views expressed may no longer be current and may have already been acted upon. This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to an authorised financial adviser.