People who look after family members free of charge are taking a huge hit to their finances which could continue into their retirement as they find themselves unable to balance paid work with their caring commitments.

Recent analysis of official figures by the financial firm Just Retirement found seven in 10 people who were receiving carer’s allowance were not in paid work, and missing out on earnings and private pension contributions.

Andresearch last year by the charity Carers UK found that 40% of those providing high levels of care for an ill, elderly or disabled relative or friend had left their employment, while 22% had reduced their working hours.

“Too often for unpaid carers in work, the immense stresses and challenges of the role with little support can mean having to reduce working hours or come out of the workplace altogether,” says Helen Walker, the chief executive of Carers UK. “This can have a significant impact on household finances, exacerbated by the current cost of living crisis.”

With just days to go until the election, the party that looks most likely to take power has said very little about what it would do to help the UK’s army of unpaid carers. The Labour manifesto does not include a single mention of the word “carer”. The Conservative manifesto does include a few brief mentions. Only the Liberal Democrats have put forward substantial proposals for better support.

Carer’s allowance is now worth £81.90 a week and is available to people who provide at least 35 hours a week of care to a disabled person.

Carers UK has been conducting an annual survey for several years, each time asking people about the impact of their role on their finances. Last year, it found 75% of those receiving carer’s allowance were struggling with cost-of-living pressures, with almost half cutting back on essentials including food and heating. The proportion saying that they were struggling to make ends meet had risen to 45%, from 39% in 2022.

The survey found that 72% were worried about the financial hit from expenses linked to caring, such as petrol for hospital visits, heating and specific dietary requirements.

Those who were employed worked in low-paid jobs as a result of the strict rules around carer’s allowance. An earnings limit means you do not qualify if you earn more than £151 a week – after that, you lose the entire benefit. The Guardian has revealed that carers who have inadvertently earned more have been taken to court by the Department for Work and Pensions.

Carers UK and Just Retirement say that these rules make it hard for people to stay in paid work.

“Removing unnecessary pressures and ensuring those who can, and want to, remain in paid work is essential,” Walker says.

She says the low level of the payments doesn’t recognise what carers do, “and there are clear problems in the way that it’s delivered, making even small amounts of work challenging. Raising the earnings limit is something that would help more carers to stay in paid work and help avoid some devastating overpayments.”

Stephen Lowe from Just Retirement says carer’s allowance was never intended to be a “wage” or payment for caring services. “However, if the rules are stopping or limiting people from taking up employment and earnings opportunities that are available to them, then we have to question whether it is fit for purpose.”

He warns that if people restrict their work or give it up entirely to provide care, “that loss of income and other work benefits such as employer pension contributions is likely to have an impact on their lives for decades to come, as well as on the businesses who lose key staff.”

Among proposals in the party manifestos for next week’s general election are a pledge by the Lib Dems to increase carer’s allowance by £20 a week and to introduce a new earnings taper of £183, after which carers would start to lose some of their allowance. Labour has previously said it would review the system but included no details in its election pledges.

Walker says that without better support for working carers, the problems they face will show no sign of abating.

“The last decade has seen a significant rise in the number of hours of unpaid care being provided and a reduction in social care available,” she says. “Our recent YouGov research revealed that 62% of UK adults – the equivalent of 10 million current or former unpaid carers – said they have had no choice about taking on an unpaid caring role.”