Labour market 2 million low earners are carers – read the Foundation’s response to the Carers 10 June 2008 NEWS RELEASE For immediate use: Tuesday 10th June 2008 2 MILLION LOW EARNERS ARE CARERS Time for the Government to break the vicious cycle of hardship Low earners are more than twice as likely than average to be carers, new polling information for the Resolution Foundation shows. The YouGov poll[1], released today to coincide with the launch of the Government’s Carers Strategy, found that 13% or nearly 2 million low earners are likely to describe themselves as carers. This is compared to the general population where six per cent described themselves as carers. The Resolution Foundation has been conducting research into the plight of low earners (households earning between around £14k and £23k and individuals between around £7,3k and £12k[2]) since 2005. The Foundation’s current project, looking at how low earners fare in the long-term care system, has found that people with caring duties often get caught in a vicious cycle of hardship: Low earners are more likely to be carers as their household is less able to afford formal care services People who care often become a low earner as they have to reduce their hours or give up work. Carers UK states that 1 in 5 five carers forced to give up work lose an average of £11,000 in income Carers are less able to save for retirement so often end up on a low income in retirement Sue Regan, Chief Executive of the Resolution Foundation, said: “With 2 million low earners describing themselves as carers – twice that of the general population, it is about time the Government addressed the struggle of low income carers.” “Carers week is a time to celebrate the vital and valued role that carers play but also a time to understand the reality of what this often means in practice. If carers are not low earners already, they are more likely to become one whilst caring or in retirement.” “The Foundation welcomes the Carers Strategy and the £38 million to help carers work and care. However, we would urge the Government to ensure that this money is focused on low earning carers to break the vicious cycle of hardship. The current debate on adult social care must also recognise the impact of caring on current and future households.” What we know about low earners and the long-term care system: The Resolution Foundation recently revealed that the fragile long-term care system faced a likely ‘care crunch’, and that low earners3 were often ‘squeezed’ the most: people are not planning for their future care needs – 7 out of 10[3] people have made no provision for their care in old age access to care is being restricted by tightening eligibility criteria and funds – local authorities continue to ration care low earners face particular challenges as they get caught on the cliff-edge of means-testing – over 72% of low earners have assets above the means-testing threshold for free state care The Foundation’s first report, ‘Lost – low earners and the long-term care market’ found that: 78% of low earners think that reform of the long-term care system is as, or more important, than improving hospitals Low earners are more likely to be both carers and care users They have a deep sense of unfairness regarding long-term care, believing the system punishes those who work and save to prepare for old age They are convinced care is declining in quality and becoming less affordable The complexity and lack of guidance in navigating their care choices is their single most pressing concern They would like to see the majority of people receiving free or subsidised care, and say they are willing to pay more tax in order for the state to deliver such an outcome The Resolution Foundation will be publishing policy proposals before the end of 2008 and is currently embarking on a period of consultation based on the key areas of weakness identified in its recent report an A to Z: mapping long-term care markets. /Ends For further information please contact Cara Brown on 020 7731 9143 / 07813 302801 or cara.brown@resolutionfoundation.org All the Foundation’s research, reports, briefings, seminar notes are available on our website www.resolutionfoundation.org The Resolution Foundation is an independent research and policy organisation established in 2005. The Foundation’s goal is to improve the wellbeing of low earners in today’s mixed economy. We aim to deliver change in areas where this income group is currently disadvantaged by producing new research and actively engaging in the policy-making process. Notes to editors: 1. Over 2000 UK adults were polled in December 2007. The poll explored people’s level of understanding and perceptions of the quality and affordability of the long-term care system, and it asked them how they would be prepared to contribute to their care costs and also resolve the wider funding shortage. Our definition is based on individuals on “low” incomes, but who are mainly independent of state support. In order to identify this group, we use an upper and lower benchmark: – Upper benchmark = those individuals and households earning up to median income. Median income is used because it is a widely understood figure, and guaranteed that we focused on households and individuals with incomes below the average. – Lower benchmark = those who receive no more than 20% of their income from welfare benefits. Using BHPS 2006 data, we calculated median income for those both in and out of work as £11,747 for an individual and £22,548 for a household. Median income is the “middle point” of the UK population. i.e., there are equal numbers of people earning above £11,747 for an individual and £22,548 for a household as earning below. Median may seem low, but this will be due to large numbers of people on very low incomes (part time workers, welfare dependents, unemployed, students, etc.). Because many people in the UK are very rich (i.e. the distribution of incomes is skewed), the average income is higher than the median (about 30k). 3. A to Z – mapping long-term care markets based on analysis commissioned from Deloitte, identified five key areas of weakness that undermine the current system: Reliance on informal care– a system which relies so heavily on informal care from friends and relatives is vulnerable and has unseen costs particularly for low earners Navigation – the severe shortage of adequate information, advice and advocacy in a highly complex system leaves people confused and under-served Funding – tight budgets result in short-term solutions which delay moves towards more efficient long-term solutions like preventative services Local variation – a postcode lottery of access to, and quality of, care exists A responsive service – it is difficult for suppliers to respond effectively to peoples’ needs
