Rising childcare costs and increasing pressure on those with caring responsibilities for older family members are putting a growing strain on employees’ financial wellbeing - with long-term implications for retirement outcomes, according to research from REBA[1] in association with WEALTH at work.

Childcare costs are a major driver of financial strain. Findings show that almost a quarter (24%) of parents could be forced to leave the workforce if costs rise further, while nearly two-thirds (59%) say increasing nursery fees would result in reduced working hours or having to leave work altogether - directly impacting income and the ability to save.

Alongside this, more than half (55%) of carers who have reduced their working hours to care for others say they have been unable to save as much for the future, highlighting how caring roles can disrupt long-term financial planning.

These challenges are contributing to lower financial resilience and increasing the risk that employees will not be able to build sufficient savings for later life. Reduced earnings, career breaks and competing financial priorities can all limit the ability to contribute consistently to long-term savings, such as pensions.

Despite this, financial wellbeing support in the workplace is not yet universal, with just over half (54%) of employers currently offering or planning to offer enhanced financial support for parents and carers.

At the same time, low levels of financial literacy around pensions remain a challenge, with nearly three quarters (71%) of employers identifying this as a key barrier to retirement adequacy and almost two-fifths (39%) of UK adults lacking confidence in managing their money. Many employees also do not know where to start when seeking financial support; something that 39% of employers identify as a key barrier to improving financial wellbeing.

Jonathan Watts-Lay, Director, WEALTH at work, comments:

“Caring responsibilities are placing significant financial pressure on many people, whether through the high cost of childcare or the need to reduce income to support an elderly relative. These pressures can make it difficult to manage day-to-day finances, but they can also have a lasting impact on an individual’s ability to save for the future.

“What we often see is that employees don’t fully understand the long-term implications, particularly when it comes to retirement savings. Gaps in contributions, even over relatively short periods, can make a significant difference over time.

“This is why financial education in the workplace is so important. By helping employees understand their financial position, the options available to them and the potential long-term impact of key decisions, employers can play a vital role in improving financial resilience and supporting better retirement outcomes.”

[1] The Financial Wellbeing Research 2025 was carried out by the Reward & Employee Benefits Association (REBA) in association with WEALTH at work amongst 223 companies representing 1.3 million employees and is available here: https://wealthatwork.co.uk/news/article/financial-wellbeing-research-2025/