Urgent £138k DWP warning to parents caring for disabled children

Millions of parents who are caring for their disabled children are being urged to act before potentially facing a shock in retirement. New figures revealed parents who exit the workforce to care for their disabled children may be £138,000 worse off in later life than typical workers, as The People’s Partnership told The Sun.

This figure is equivalent to roughly nine years worth of retirement savings, according to the Pensions and Lifetime Savings Association which notes that a single pensioner needs at least £14,400 per year for essentials in retirement. The calculation details how vital workplace pension contributions can be, which parents who care for their children full-time will miss out on, particularly when taking into account the compounding effect of consistently contributing to a pension throughout a person’s career.

This means these parents won’t be receiving the benefit from employer contributions and the tax exemptions, with The People’s Partnership research suggesting 6.7 million people across the UK face a financially tight retirement due to their caring responsibilities. It also found that two-thirds of parents of disabled children are worried about their financial future.

In light of the study, The People’s Partnership is calling on employers to allow parents more flexibility to balance their responsibilities at work and at home so they aren’t forced to sacrifice their retirement to care for their children.

The group noted that even some part-time work can make a major difference to the pension pots of these parents, noting a £49,000 improvement at retirement for those who return to work part-time than those who never return, although this is still a £89,000 dip from parents who work full-time. Parents who take a brief break to care for their child but return to full-time work are roughly £83,000 better off in retirement.

Chief executive of disability charity Sense, Richard Kramer commented on the “stark reality” parents of disabled children face due to their caring duties, urging governments to “commit long-term resource and funding” to help these families by enabling their employers to provide more supportive environments and flexible policies.

He noted: “Very few parents, who are struggling day to day, will have the luxury of thinking about retirement, so it is little surprise that they’re at such a disadvantage when it comes to saving.”