Parents of disabled children are being urged to act before running the risk of facing a shock in retirement in later life.
Parents Caring for Disabeled Children Could Face a £138 Retirement Setback
New data shows that parents who quit the workforce to care for their disabled children could be £138,000 worse off in the future compared to average workers, as stated by The People's Partnership to The Sun. According to the Pensions and Lifetime Savings Association, this sum is equivalent to nearly nine years' worth of retirement savings.
The association explained that a single pensioner needs at least £14,400 a year for essential expenses during retirement. This calculation puts emphasis on how crucial workplace pension contributions are, which full-time child-care providers will miss out on.
This is particularly important when the compounding effect of regular pension contributions throughout an individual's career are taken into account.
As a result, these parents won't be getting the benefits from employer contributions and tax exemptions. Figures from The People's Partnership claim that 6.7 million people across the UK may have to face a financially tight retirement due to their caregiving duties.
Challenges Faced by Parents of Disabled Children
The study also pointed out that two-thirds of parents caring for their disabled children are worried about their financial future. The People's Partnership is now calling on employers to give parents more flexibility in order to allow them to find the right balance while juggling between their professional and personal life duties, so that they won't have to jeopardize their retirement security to take care of their children.
The group has emphasized that even a return to part-time working can significantly increase parents' pension savings, with a £49,000 retirement boost in contrast to those who never rejoin the workforce. However, this figure is still £89,000 less than what full-time working parents earn.
Parents who take a short break to take care of their child but eventually return to full-time work will end up with about £83,000 more in retirement.
Chief executive of disability charity Sense, Richard Kramer addressed the “stark reality” parents of disabled children are confronted to due to their caring responsibilities, pressing governments to “commit long-term resource and funding” to assist these households by allowing their employers to provide more accommodating environments and flexible measures.
He stated: “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.”