How caring for family members affects student loan repayments, Carer's Allowance below threshold, reducing work hours, and managing loans during extended caring periods
Caring for family members—elderly parents, disabled relatives, or seriously ill loved ones—often requires reducing work hours or stopping employment entirely, automatically lowering or pausing student loan repayments. Carer's Allowance provides £81.90 weekly (£4,259 annually), far below the £25,000 student loan threshold, meaning zero loan deductions for full-time carers receiving only this benefit. Even part-time caring that forces reduced work hours typically drops income below or near threshold, significantly reducing monthly loan payments.
The PAYE system adjusts student loan deductions automatically when you reduce hours or leave employment for caring responsibilities—no notification to Student Finance England required. During caring periods, your loan balance grows with interest but this growth gets cancelled at the 40-year write-off for most graduates. Many carers work reduced hours long-term, keeping income around £20,000-£28,000, resulting in low or zero loan payments throughout their caring years. Understanding how caring responsibilities interact with student loans helps reduce financial stress during already demanding periods when family needs must come first.
Carer's Allowance is the main benefit for people providing substantial care. The amount falls dramatically below the student loan threshold, ensuring zero repayments for those relying on this income alone.
| Income Source | Annual Amount | Student Loan Payment |
|---|---|---|
| Carer's Allowance only | £4,259 | £0 (below threshold) |
| CA + part-time work (£10k) | £14,259 | £0 (below threshold) |
| CA + part-time work (£22k) | £26,259 | £94.43 annually |
| Working while caring (no CA) | £28,000 | £270 annually |
Key point: Carer's Allowance itself never triggers student loan repayments. Only employment income above £25,000 results in deductions.
Important consideration when working alongside caring:
Most carers reduce work hours rather than stopping entirely, balancing caring responsibilities with maintaining some income. This reduction automatically lowers student loan repayments.
Full-time to 4-day week
Full-time to 3-day week
Full-time to part-time (2 days)
Example: Reducing from £38,000 full-time to £21,000 (3 days) for caring
Income changes:
Practical considerations:
Some caring situations require leaving employment entirely. With no work income, student loan repayments automatically stop through the PAYE system.
Example: Leave £35,000 job to care full-time for elderly parent
Previous income (working):
New income (full-time carer):
Income drop: 65-83% reduction
Some employers offer flexible arrangements allowing carers to maintain employment while meeting caring responsibilities. These typically involve reduced hours or adjusted schedules that lower income and student loan payments.
Compressed hours:
Job share:
Remote/hybrid working:
Unpaid carer's leave:
All employees can request flexible working from day one:
Extended caring periods affect career progression and lifetime earnings, which influences total student loan repayment but does not change the 40-year write-off guarantee.
Scenario: 10 years reduced hours caring (£21,000) vs full career (£38,000+):
Full career path (no caring):
Caring path (10 years reduced hours):
Net impact:
Many carers face reduced career options after extended caring periods:
When caring responsibilities end or reduce, returning to work restarts student loan repayments automatically based on your new employment income.
Gradual return (part-time first):
Career change to more flexible role:
Full return to previous career level:
Carer's Allowance at £4,259 annually falls far below the £25,000 threshold. Reduced work hours for caring typically drop income below or near threshold, significantly lowering payments. The income-contingent system protects carers by adjusting repayments to whatever you can afford while prioritizing family needs.
UK Education Policy Specialist
With over 15 years of experience in UK education policy and student finance, Dr. Sharma founded Student Loan Calculator UK to help students navigate the complex world of student loans.