The cost of caregiving: women’s financial gap
Caregiving, pay gaps, and rising costs threaten women’s retirement.
Welcome to #269 weekly newsletter from The Purse.
The burden of the “sandwich generation”
In the UK, 1.4m people are identified as sandwich carers, juggling care for both children and ageing parents, 61% of them are women. In the US, the sandwich generation comprises about 23% of adults, and for those in their 40s, it’s even starker—54% are sandwiched between dual caregiving responsibilities.
It’s a role that demands time, energy, and money—often at the expense of a woman’s financial security.
The hard numbers
The financial toll on women in the sandwich generation is immense:
According to a report by Fidelity International, 52% of UK women expect to run out of money during retirement, indicating uncertainty about sustaining their income.
Research by Scottish Widows shows 42% of UK women face poverty in retirement, compared to 35% of men.
Women retire with an average of £69,000 in pension savings, compared to £205,000 for men—a 66% gap.
Care home costs in the UK average £1,000 per week, forcing families to sell assets or dip into savings.
The bigger issue
The problem isn’t just pensions. The gender investment gap in the UK reached £567bn in 2024, with women missing out on wealth-building opportunities.
This disparity has far-reaching consequences. When women aren’t fully participating in wealth-building, the economic impact extends beyond individual households—it affects society at large.
Who’s paying attention?
Some companies are stepping up. Patagonia, for example, offers on-site childcare, ensuring 100% of new mums return to work, compared to the US average of 79%.
Joeli Brearley, MBE and founder of Pregnant Then Screwed, testified to the Public Bill Committee on the Employment Rights Bill in November last year. And she highlighted the limitations of the current flexible working laws in the UK, stating:
"A right to request is still a right to decline, and we strongly feel that it does not go far enough in changing the dial on flexible working."
She further advocated for an advertising duty to ensure employers design jobs as flexible from the outset, indicating her belief that flexible working should be the default to support working parents effectively.
In the UK, Mercer suggests raising pension contributions from 8% to 12% to close the gender pension gap. But these changes are slow, and women can’t afford to wait.
What’s next?
If you’re part of the sandwich generation, here’s how to protect your financial future:
Plan your retirement now.
Decide when you want to retire and estimate how long your savings need to last.
Maximise contributions.
Use ISAs, pensions, and workplace schemes to secure your retirement savings.
Find a financial planner.
Work with an expert to create a plan that accommodates caregiving and ensures financial resilience.
Join a community.
Engage with networks that empower women to talk about money and share strategies for wealth-building.
Speak up.
Advocate for systemic changes, including better caregiving policies, increased pension contributions, and support for affordable care.
Key takeaways
Women in the sandwich generation face immense financial and emotional strain from dual caregiving roles, risking their retirement security due to systemic inequities like the gender pension gap and limited caregiving support. Whilst systemic reforms are critical, financial planning can help prevent caregiving from undermining women’s financial future.
We’d love to hear from you. Get in touch with Jana via the The Purse website or tweet @jointhepurse and janicka. We do no provide investment advice. Please do your own research or speak to a financial adviser.
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