Combining work and family life: the pension penalty of caring

Abstract

This paper uses work and caring history information from the British Family and Working Lives Survey (1994/5) to examine the provision of family care and its impact upon the employment and the subsequent state and private pension entitlement among mid-life men and women. Combining paid employment with care-giving was not an option for a significant minority of women with caring responsibilities in mid-life. One-in-five mid-life women who have ever had caring responsibilities reported that, upon starting caring, they stopped work altogether, and another one-in-five reported that they worked fewer hours, earned less money or could only work restricted hours. Fewer men and women who stopped work as a result of caring were members of an occupational pension scheme than other groups ; and they had accumulated fewer years of contributions than their counterparts who continued working, with direct implications for their level of pension income in later life. The extension of employers' schemes to help workers balance paid work and family responsibilities would facilitate more carers remaining in the labour market, as would an explicit carers' dimension within the new 'Working Tax Credit '. Consideration should also be given to extending credits for second tier pensions to working carers who provide care for over 16 hours a week and who earn below the lower earnings limit. This will ensure that carers who juggle low paid work and care are not penalised for working, and that their unpaid contribution to society is recognised.

Mapping support policies for informal carers across the European Union

“…Indirect or direct financial support has been developed as a way to compensate carers. The reduced labour market participation associated with informal caring has also been recognised, as well as its associated long-term consequences for pensions [6,[24][25][26][27].…”

Work Engagement of Older Employees: do Employee and Work-Related Factors Matter?

“…The retired individuals who experience health issues are most likely to be economically disadvantaged. Meanwhile, individuals with the need to take care of family members are less likely come back to labor market (Evandrou & Glaser, 2003).…”

Gender and Generational Continuity: Breadwinners, Caregivers and Pension Provision in the UK

“…The mechanisms which she considered included access to schemes, basis of benefit calculation, number of coverage years, credits for unpaid care work (for children and other family members), the extent to which benefits derive from marriage alone, and universalism versus means testing. She concluded that whilst the UK basic state pension was fairly gender neutral (and here, she possibly underestimated its gender bias, see Evandrou and Glaser (2003)), the UK state earnings related scheme was highly discriminatory, compared with other countries. Ginn (2004) extended this framework to consider the role of private pensions in the system.…”