Cover Magazine reports that the so-called “sandwich generation” could be sacrificing as much as £6,000 a year in lost income to provide care for elderly parents.
Nearly 40% of those aged 45-75 support older relatives, as well as having child dependants, with many carers forced to reduce their hours or stop work altogether.
Adding further pressure to this generation could be an over-reliance on cash. It might mean that your own wealth does not work as hard for you as it could.
Thankfully, financial advice can be incredibly useful here. Keep reading to find out how.
UK carers miss out on £522 of income a month on average, often at an important moment in their careers
Figures suggest that the UK’s sandwich generation misses out on valuable income when caring responsibilities force them to:
- Reduce their hours (28%)
- Stop work altogether (9%).
On average, carers are losing £522 a month, or £6,268 a year. But these figures are even higher for sole carers, rising to as much as £1,000 a month.
Last year, MoneySuperMarket found that adults caring for children and ageing relatives provided more than £16,700 worth of unpaid care per person each year. This totals a massive £160,700 over 10 years.
According to Office for National Statistics (ONS) figures, meanwhile, this sandwich generation consists of around 1.4 million UK adults, with unpaid care costs totalling £24 billion a year. If you are currently looking after your elderly parents, you no doubt don’t see this as unpaid caregiving. But the effect on your income shouldn’t be overlooked.
You may well be reaching the height of your career, which could mean the highest salary you’ll ever earn too. This compounds the negative effect of lost hours with potential ramifications for your pension contributions and savings.
One way to factor this loss of income into your long-term planning is to consider whether you have an over-reliance on cash, and to make changes while your retirement is still some time away.
Easy access cash can be incredibly useful in emergencies, but taking some investment risk may provide the chance for better returns
Investment markets generally performed well in 2025, despite global noise
MoneyAge reported in January that Cash ISA inflows for December hit £5.2 billion, a record for a non-tax year-end month.
Interestingly, this coincided with the chancellor’s Autumn Budget announcement of an effective cap on Cash ISA savings for under-65s, expected to come into force from April 2027. The measure is intended to get UK consumers investing, but the figures suggest it hasn’t yet had the desired effect.
Investing could be one way to partially combat potential future care costs, though. Despite a turbulent year geopolitically, 2025 was a bumper year for the FTSE 100, and it topped 10,000 points for the first time on 2 January 2026.
We know that markets trend upward over time and that short-term volatility is to be expected, but annual returns of 21.5% (more than double those in 2024) and the index’s best year since 2009 highlight the resilience of stock markets over the long term. Note, of course, that past performance is no guarantee of future performance.
You might consider investing in a Stocks and Shares ISA. While this involves a greater level of risk than a Cash ISA, the potential for returns is generally greater too.
High inflation means that your cash holdings might not be working as hard as they should
In an environment of sticky inflation, revisiting your high street bank savings might be a good option too. The Consumer Prices Index (CPI) increased to 3.4% for the 12 months to December 2025, remaining stubbornly above the Bank of England’s (BoE) 2% target.
When inflation is higher than the interest rate paid by your bank or building society, your money is effectively losing value in real terms. While you might be well advised to keep an emergency fund of between three and six months of household expenditure in an easy access account, any excess might work harder for you if invested.
This could be especially important if you find your income dropping due to care commitments.
Advice is about living the life you want now, and in the future
Long-term planning, along with careful budgeting and cashflow modelling, can help you to plan for the life you want in the future, while enjoying your life today.
Tomorrow is full of “What if?” questions, and while none of us knows what is around the corner, planning for potential later-life costs now can ensure that you remain on track to your goals, whatever life throws at you.
Get in touch
If you’re looking for an independent financial adviser in Milton Keynes or Olney, look no further. At Jane Smith Financial Planning, we’ve been helping clients for 30 years, so contact us at info@janesmithfinancial.com or call 01234 713131 to see what we can do for you.
Please note
This article is for general information only and does not constitute advice. The information is aimed at retail clients only.
The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.
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