Categorised in Good To Know
“Being a carer is great for your finances,” said absolutely no one, ever. If you’re reading this and you are a carer, you’ll understand!
I don’t think us carers talk enough about personal finances. We’re caring people: We’re always thinking about the people in our lives who we look after. We maybe don’t give enough thought to our financial future.
If you don’t know my background, I am quite a rarity. I left the workforce to become the main carer for my children while my wife was the one to go out and work full time.
Every now and again I am asked what tips I would give someone who is thinking of becoming a stay at home dad. I think most people expect me to talk about changing nappies, dealing with tantrums or weaning kids on to solids.
My response to this question never fails to take people by surprise. I say they need to think about their pension and personal finances.
There are a huge number of parenting books, websites, blogs (I should know, I write one!), YouTube channels and Instagram accounts dedicated to the nuts and bolts of being a parent. What amazes me is how little discussion there is about the impact on your finances of becoming a mum, dad or fulfilling some other caring role.
Many years ago, long before I had kids, I worked for a charity that was involved in alleviating pensioner poverty. This is an issue that has affected generations of women who left work to become carers, often raising children before then going on to look after older members of the family.
This simply wasn’t an expectation made of men in years gone by, so pensioner poverty almost exclusively affected women. Some of these women never returned to the workforce while some only ever went back part time.
Almost none of them kept up their National Insurance Contributions or paid into a private pension. This made them reliant on their husbands in old age and if they were widowed, the implications could be very serious. If they got divorced, the financial implications were often devastating.
A lot has been done to help women avoid these issues. Male carers, especially men like myself who have been stay at home dads, are quite a modern phenomenon. The advice and help is simply not available to us. In time I think this will change, but if I were asked tomorrow what a carer, be they male or female, needs to consider, the first thing I will always say is “look at your personal finances.”
Can you afford to make voluntary National Insurance Contributions? Will you be able to pay into a private pension? Stakeholder pensions can be very flexible and allow you to make very small contributions if that’s all you can afford (something would be better than nothing).
Will you be able to do any paid work alongside your caring responsibilities? Are you planning to return to the workforce after a long absence? If so, will you need to invest time and money in new qualifications or training?
You need to think about life insurance and critical illness cover. After all, if you were incapacitated because of illness or had the misfortune to die, who would take your place as a carer? Insurance cover should at least help your loved ones pay for the additional caring help they need and it can cost as little as a bottle of wine a month.
While it’s a not a pleasant thought, you almost certainly want to think about having a will. I have a story to tell about this.
Neither my wife nor I used to have a will. We didn’t see the point, if one of use died all our assets and the caring responsibilities would simply pass over to whichever one of us was remaining.
One day a solicitor said we should have wills and what he said knocked the air out of my lungs. He said:
“I want you to think about wills. It’s all very well if one of you dies, but what if you both die?”
It was such an obvious thought, but it had never crossed my mind. By not having a will, we were putting our children’s financial future in jeopardy, not to mention the fact we had no formal plan in place for who would look after the kids if we both passed away.
What the solicitor said was enough of a kick up the bum. We very soon had wills in place!
I have plenty of other advice for carers. Keep up your social connections and friendships, take some “me” time each day, look after your health etc. Many people will offer similar tips and advice.
For some reason, nobody ever says “look at your finances.” That, however, is my top tip and it’s a subject that too many people overlook.