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Care in crisis: more than 5.3 billion wiped from the economy

26 September 2012

£5.3bn cost to the economy in lost earnings of carers giving up work to care

New analysis from Age UK, building on work from the London School of Economics[1], reveals an estimated £5.3bn[2] has been wiped from the economy in lost earnings due to people who’ve dropped out of the workforce to take on caring responsibilities for older or disabled loved ones.

The figure has cost the exchequer almost £1 billion in forgone taxes. Currently, £14.6 billion is spent on adult social care services in England.

Age UK and Carers UK warn that these figures demonstrate the personal impact of an underfunded and unfit care system. To wider society this represents a large drop in output potential as over 300,000 people are no longer able to remain in the labour market and directly contribute to economic growth.

There is a clear and urgent need to reform the current care and support system so that family carers do not find themselves unable to reconcile work and caring responsibilities as a result of poor state support for their loved ones. The charities fear that any further delays to reform of the social care system will not only compromise the health and dignity of older and disabled people, but will also stall growth to the economy.

The impact of the care crisis is felt every day by vulnerable older people and their carers who do not receive the care and support they need from the state. A toxic combination of years of under-funding, restrictions in eligibility criteria, rise in care charges and lack of national entitlement has created a ‘care lottery’ to care services which are leaving many vulnerable people left to fend for themselves at a time when they need help the most.

The lack of state support is pushing informal carers into an impossible choice between staying in paid employment or being at home to care.

The charities urge that sustainable reform is desperately needed to help older and disabled people live with dignity and independence in later life and to support families juggling work and caring responsibilities. The figures are revealed at a crucial time as the Government prepares to publish its long-awaited white paper on social care reform.

Michelle Mitchell, Charity Director General of Age UK said: “These figures show the staggering cost of the social care crisis, both to individuals giving up work and to the wider economy through lost earnings. For many people, caring for a loved one is second nature and they wouldn’t have it any other way. But carers should never be forced to sacrifice their own financial security and wellbeing due to the lack of service provision and support from public services.

Care cannot wait any longer – this is the Government’s last chance to get it right and set their political legacy for generations to come.  It is a complex issue, but one where the Coalition Government can transform the way we care for older people and lift uncertainty and fear out of later life, as well as benefit the economy. It’s time for the Government to be bold and not shirk from its responsibility as legal reform on its own will not stem the tide of the crisis.”

Helena Herklots, Chief Executive of Carers UK said: "Caring is part and parcel of life for all our families, but every day we are hearing about the heavy cost to family finances of carers being forced to give up work to care. Many are left struggling to make ends meet, often in lasting hardship and isolation and unable to return to the labour market.

But the national crisis in care is not just bringing a high personal cost to families - it is costing the UK billions. The crisis is costing businesses and the economy hundreds of thousands of workers, and the loss of their skills, tax contributions and spending power – often because their families just cannot rely on support from the social care system to help them juggle work and care.

It is time for a change in mindset from Government, to recognise this economic imperative for delivering bold, urgent and decisive action to reform social care."



[1] Pickard L (2012) Public Expenditure Costs of Carers Leaving Employment. LSE Health and Social Care Blog. London School of Economics & Political Science, 25 April 2012 at:

[2] Age UK (2012) Estimation of the Financial Impact of Leaving Work due to Caring Responsibilities. Age UK












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