The cost of caring and why employees need more support.

As the cost of living has risen, so has the financial strain on employees balancing work with caring responsibilities.

WEALTH at work’s Financial Wellbeing Research 2024 with REBA[1] highlights that just over one-quarter of parents believe that the cost of childcare is more than 75% of their take-home pay. Also, 76% of mothers who pay for childcare say that it does not make financial sense for them to go to work.[2]

Carers are also facing similar pressures. Figures[3] reveal that of the 10.6 million carers in the UK, 16% of unpaid carers are in debt due to their caring role. This rises to 40% for those in receipt of Carer’s Allowance.

Employers are becoming more aware of the financial pressures caused by caring responsibilities. Almost 3 out of 4 (73%) believe costs affecting working parents (e.g. childcare and maternity leave) is a financial wellbeing risk. Almost half (46%) of employers also recognise that costs affecting carers in the workplace (including eldercare) is a risk to financial wellbeing.

Many employers are now looking to take action to better support this cohort of employees. Over two-fifths (41%) of employers have agreed that costs affecting carers (including eldercare and childcare) is a driver to improve financial wellbeing offerings in the future. As well as this, 50% of employers are currently offering or are looking to offer enhanced financial support above statutory minimums for working carers.

Jonathan Watts-Lay, Director, WEALTH at work comments;

“The spiraling cost of caring for children, elderly relatives or others is having an increased impact on workplace financial wellbeing strategies. It’s good news that employers are acting on the need to provide support for this cohort.”

He adds; “It’s really important that employers check that any support provided is suitable and effective for their workforce and that employees know how to access it. Financial education is the key element which underpins it all. After all, financial wellbeing is about being able to make informed choices about your finances, whether you are a new parent managing childcare costs, struggling to pay the monthly bills, saving for a first home, or planning for retirement. Ultimately, helping the workforce to become more financially resilient throughout their career, is a win for employers and employees alike.”

To help, see our tips on how to support employees to improve their financial wellbeing, no matter what life event they may be experiencing:

1. Help employees build financial resilience: Employees should be supported to navigate challenges such as how to manage debt and create a budget when finances may be tight. Positive savings habits can also be encouraged through offering saving vehicles such as a Workplace ISA.
2. Empower your people with engaging education: Many leading employers recognise the need to help their people improve the way they manage their money, build financial resilience and navigate life events, and provide financial education and guidance in the workplace to help.
3. Offer tailored support: To make it meaningful, financial education should be tailored to each demographic in the workplace. For example, this could be by career stage or based on life events such as becoming a new parent.
4. Bring in a provider: Taking a proactive approach and working with financial wellbeing specialists is a great way to help people engage with their finances throughout their career.