Who pays for unpaid care? The financial costs that can last a lifetime

This blog post is based on an article published in the Journal of Social Policy by Louise Overton and Maxine Watkins.

Every day, millions of unpaid carers help sustain Britain’s health and social care system, often at the expense of their own long-term financial security.

Too often, discussions about unpaid care focus only on today’s financial pressures, such as the out-of-pocket expenses or lost salary due to reduced hours at work. These matter, but they tell only part of the story. The greatest financial cost of providing care might not be what carers lose in the short term. It might be what they never have the chance to build: a career, pension savings, financial security, or a comfortable retirement.

These are some of the hidden consequences of unpaid care highlighted in our recent research, published in the Journal of Social Policy. Our findings suggest that the financial effects of caring accumulate over time, shaping people’s financial wellbeing for decades.

The study involved in-depth interviews with fifty unpaid carers from across Britain, representing different ages, caring situations and socio-economic backgrounds. Rather than looking only at income or employment, we explored financial wellbeing more broadly, including financial security, control, stress, and ‘peace of mind’ about current and future finances.

One message emerged consistently: caring rarely creates a single financial shock. Instead, it interacts with personal, familial, and societal influences, gradually reshaping carers’ financial futures across the life course.

The hidden costs of caring

Many carers described the immediate costs of providing care, including travel to appointments, increased household bills, specialist equipment, home adaptations, and everyday expenses. For younger carers and those on low incomes, these additional costs often meant there was little or nothing left to save for the future.

However, the largest financial costs were often indirect.

Many participants explained how caring had changed their working lives. Some reduced their hours, others turned down promotions, accepted lower-paid but more flexible roles, or left employment altogether because balancing paid work and care had become impossible. Even those who remained in work often felt permanently ‘on call’ which hindered opportunities for career progression or training.

These decisions were rarely experienced as genuine choices. Most carers were responding to immediate pressures without considering what those decisions might mean for their finances ten or twenty years later. Looking back, many said they had underestimated the long-term impact on their financial security.

Why timing matters

Our research also shows that when caring occurs is just as important as how much care someone provides, and for how long.

Young adults trying to establish financial independence faced very different challenges from people approaching retirement. Younger adult carers spoke about delaying home ownership and struggling to build savings. Mid-life carers often juggled employment, children, and ageing parents while making difficult decisions that reduced pension saving. Those nearing retirement reflected on interrupted careers and lower savings, worrying that they had reached later life without adequate financial security.

And these experiences weren’t evenly distributed. Carers with housing wealth or financial assets were better able to absorb the financial consequences of caring, while those with fewer resources experienced caring as another layer of disadvantage. Financial wellbeing therefore emerged not as a fixed outcome for all carers, but as something shaped by personal circumstances alongside wider employment, welfare, and care systems throughout life.

When caring becomes a private financial risk

Our findings also raise wider questions about who bears responsibility for care.

Participants frequently described making significant personal and financial sacrifices because affordable, appropriate, or trustworthy formal care services were unavailable. Others struggled to navigate a benefits system that often failed to reflect the realities of unpaid care. As a result, many of the financial risks associated with caring continue to be borne by individuals and families alone, despite unpaid care providing enormous public value.

As Britain’s population ages and demand for care increases, this approach looks increasingly unsustainable. Relying on unpaid carers to absorb long-term financial losses risks undermining labour market participation, retirement security, and the sustainability of care itself.

Implications for pensions

Our findings also contribute to current debates about pension adequacy.

The Pensions Commission’s Interim Report argues that extending working lives will be central to improving retirement incomes. However, our research suggests this will remain difficult unless unpaid caring is recognised as a structural constraint on labour market participation, rather than simply a private family responsibility.

For many carers, reducing working hours or leaving employment was not a lifestyle choice but a practical response to caring responsibilities. Even relatively short periods of caring could lead to missed promotions, lower earnings, and reduced pension contributions. For many women, repeated episodes of caring for children, parents, and partners created cumulative reductions in pension wealth that only became fully apparent as retirement approached.

In the article we make recommendations suggesting that, alongside improvements to social care and employment support, policymakers should consider stronger pension protections for carers, including better recognition of unpaid care within pension policy, clearer guidance when caring begins, support to maintain pension contributions during intensive caring periods, and more generous (paid) carers’ leave alongside flexible employment.

A different way of thinking about care

Our research shows that caring shapes financial wellbeing across entire lifetimes, influencing employment, pensions, and financial security long after caring has ended.

Recognising and addressing these hidden, long-term costs is essential if we want a pension system that is both fair and adequate, and a society that properly values the people who sustain it.

Reference

Overton, Louise, and Maxine Watkins. 2026. “The Costs of Caring: Understanding the Lived Experience of Unpaid Caregiving and Risks to Financial Wellbeing.” Journal of Social Policy: 1–23. doi: 10.1017/S0047279426101536.

About the Authors

Louise Overton is an Associate Professor in Social Policy and Director of the Centre on Household Assets and Savings Management (CHASM) at University of Birmingham, U.K.

Maxine Watkins is a Research Fellow in the Centre on Household Assets and Savings Management (CHASM) at University of Birmingham, U.K.