Disability, caring responsibilities and financial hardship in low-to-middle income households

Key messages

• around one-third of adults in low-to-middle income families are disabled, a carer, or both
• families that include both a disabled person and a carer face significantly higher rates of material deprivation than families without these circumstances
• income levels are lower in households that include a disabled person or both a disabled person and a carer, even after controlling for demographic characteristics
• disabilities and caring responsibilities can limit participation in paid employment, including reducing working hours or preventing work altogether
• many carers report financial strain linked to the design of Carer’s Allowance, including strict earnings limits and administrative complexity
• public spending on support services for unpaid carers has fallen substantially, with expenditure on carer support in England falling by around one-third since 2014-15

Policy implications

• reforms to the social security system may be required to better support households with disabilities and caring responsibilities
• Carer’s Allowance could be redesigned to remove sharp earnings thresholds and reduce administrative burdens for carers
• employment policies should better support disabled workers and carers who want to remain in or return to work
• restoring funding for support services for unpaid carers may help reduce financial pressures and improve wellbeing
• broader policy responses may need to consider the interaction between disability, unpaid care and labour market participation

Gaps

• the analysis focuses primarily on low-to-middle income households, so findings may not capture experiences across the full income distribution
• further research is needed on long-term financial trajectories for households affected by disability and caring responsibilities
• additional evidence would help clarify how policy reforms affect both carers’ financial wellbeing and care outcomes

Commentary
This report examines how disability and unpaid caring responsibilities shape financial circumstances for families across the UK. It shows that disability and caring are closely linked with lower household income, reduced employment opportunities and greater exposure to material deprivation, particularly among low-to-middle income households.

The findings highlight how caring responsibilities can affect participation in the labour market. Many carers report reducing their hours, changing jobs or leaving employment entirely because of the demands of providing care. At the same time, the structure of Carer’s Allowance – including earnings limits and strict eligibility rules – can create financial instability and discourage some carers from increasing their working hours.

From a social care equity perspective, the report illustrates how financial systems and welfare policies shape the distribution of care responsibilities and resources. When support for unpaid carers is limited, the financial consequences are often concentrated among households already facing economic disadvantage. Reductions in public spending on services that support carers, such as respite provision, can intensify these pressures and shift more responsibility onto families.

Overall, the analysis demonstrates that disability and unpaid care are central drivers of financial inequities within the UK. Addressing these challenges requires policy approaches that recognise the economic value of unpaid care while ensuring that carers and disabled people are not pushed into financial hardship as a result of the support they provide or require.