Unpaid carers across Britain are missing out on around £160 a month because Carer’s Allowance has failed to keep pace with wage growth over nearly five decades.
Analysis by Carers UK, using data from the Office for National Statistics (ONS), found the benefit currently stands at £86.45 per week.
The charity said that if payments had risen in line with average earnings since the allowance was introduced in 1976, recipients would now receive around £123.48 per week.
This leaves carers £36.93 worse off each week.
The shortfall is broadly equivalent to a typical monthly household energy bill, estimated at around £147.
Carer’s Allowance equates to approximately £2.47 per hour and is paid to those providing at least 35 hours of care each week.
Carers UK said around 500,000 recipients are living in poverty, representing 62 per cent of those receiving the benefit.
The charity’s research found that 49 per cent of carers have reduced spending on essentials such as food, heating, clothing and transport over the past 12 months.
Carer’s Allowance worth £160 less a month than if it matched wage growth, charity warns
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Financial pressures have also pushed many into debt, with a third reporting the use of credit cards, loans or overdrafts.
Energy bills remain a key concern, with 84 per cent of carers reporting rising costs.
Carers UK said more than 600 people leave work each day to take on caring responsibilities, often facing additional costs linked to disability or long-term health conditions.
The charity added that 62 per cent of current and former carers said they had no alternative care options available.
Carers UK is now calling for a full review of the benefit and wider support system
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Carer’s Allowance was originally introduced in 1976 as Invalid Care Allowance following campaigning by the National Council for the Single Woman and Her Dependents, now part of Carers UK.
At the time, payments were set at £7.90 per week.
The Carer Poverty Coalition has written to ministers requesting an assessment of how caring responsibilities affect employment, finances and access to welfare.
Labour has recently increased the earnings threshold to 16 times the National Living Wage and proposed a taper system to replace the current cut-off point.
However, Carers UK said wider issues with the benefit remain unresolved.
Helen Walker said: “These figures are concerning because we hear regularly from carers who are providing far more than the 35 hours of care required to qualify for Carer’s Allowance while struggling to make ends meet.
“Many tell us that their income simply isn’t enough to cover the basics.”
Ms Walker said demand for care is rising alongside an ageing population.
“Unpaid carers are increasingly stepping in to fill the gaps, often providing intensive support and managing complex health conditions.”
She added: “Fifty years on from the introduction of Carer’s Allowance, it’s time for a full review to ensure the benefit properly recognises the vital role carers play and provides the financial security families need to keep caring.”