Why Your Pension Plan Might Not Cover Every Employee, And What HR Can Do About It

Pension schemes are built around a straight line: join, contribute steadily, retire. 

But most careers don't run that way.

People take parental leave, go through divorce, take sabbaticals, are signed off sick - and each of these scenarios can reduce what ends up in a pension pot.

Carers are affected more than most. 

Caring for a parent, partner, or child often means reduced hours or a complete career break. 

Caring responsibilities are also a recognised driver of the gender pay gap, so the impact on pension contributions builds up over time.

It's in this respect that pension plans don't cover every employee. More time off and stunted career growth means a smaller overall pot. And for working carers, that gap matters more than for most groups.

For HR and benefits leaders then, it's not just the pension provider itself that matters. It's also the support you can offer outside of the pension, that enables every employee to make the most.

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Working carers

There are 5.8 million unpaid carers in England, which is nearly 1 in 5 people. Most organisations with 250 or more staff will likely already employ several.

According to Carers UK's State of Caring 2025 survey, 21% of carers have moved to lower-paid or more junior roles to manage their responsibilities, and 35% have reduced their hours.

Separate research shows 600 people a day leave work altogether because of caring. 88% of carers have considered reducing their hours, and around 80% have considered leaving the workforce entirely.

None of this tends to happen as one decision. Caring responsibilities usually arrive without warning: after a diagnosis, a fall, or a phone call from a hospital. 

Most employees don't tell their employer until they've already started cutting hours or are thinking about leaving. That's exactly when pension contributions will start to stall, and it's largely invisible to HR until it's a resignation letter or a request for reduced hours.

Parental leave, sabbaticals, sick leave and divorce

The same pattern shows up elsewhere, on a smaller scale.

Statutory pay during parental leave or long-term sick leave is often lower, and pension contributions can fall with it unless an employee arranges to top it up. Sabbaticals carry the same risk if contributions pause without anyone flagging it.

Divorce can significantly affect pension value, particularly for the lower earner, and pension assets are often overlooked in separation compared with property or savings.

In each case, employees are usually too occupied with what's in front of them to think about the long-term impact on their retirement.

Saving money isn't the whole answer

The perfect pension package won't stop an employee from having to leave a meeting to take a hospital call, spend evenings arranging care, or lose a day's pay sorting out Power of Attorney.

Employees who are sick, or caring for someone who is, need support now. Without it, even a strong pension scheme won't stop people from reducing their hours or leaving.

Where KareHero fits in

KareHero doesn't provide financial or pension advice. We support the caring responsibilities and life disruptions that sit behind these decisions, before they turn into reduced hours or a resignation.

Employees matched with a KareHero Care Advocate get practical support to understand, find, and fund the right care. This might be for a parent, partner, sibling, adult child, friend, or themselves, and includes help with the legal and admin side.

Many families don't realise what support they're entitled to; around half of people eligible for government funding never apply for it. That kind of support can be the difference between an employee stepping back from work during a caring crisis and staying in their role, with their income and pension contributions intact.

For HR teams, that also means:

• Fewer employees making sudden decisions to reduce hours or leave during a caring crisis
• Earlier visibility of employees juggling care, so support can happen before it affects contributions or performance
• A benefit that works alongside pension and financial wellbeing offerings, covering the practical and emotional load that a pension alone can't

If you’re still understanding how your existing benefits and policies help carers - and how you stack up up against your peers - take our 5-minute quiz, ‘Are you prepared for the government's upcoming changes?’ 

Want to see how KareHero fits alongside your existing pension and financial wellbeing benefits? Book a demo today to discover how at karehero.com/contact-us/book-a-demo.

This article was originally written by KareHero for REBA.