Carers at risk of missing out on full state pension – how to boost your retirement

Boris Johnson briefs cabinet on National Insurance cuts

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Unpaid carers are able to use Carer’s Credit which is a benefit designed to help those who look after someone for at least 20 hours per week. This is a National Insurance credit that helps someone with gaps in their record, with 35 years of contributions being needed to get the full state pension. A carer is likely to have gaps in their record as they may have had to leave the workforce for a period of time.

This benefit is accessible as it allows people to continue with their caring responsibilities without impacting someone’s ability to qualify for the state pension.

It should be noted that someone’s income, savings or investments will not impact their eligibility for Carer’s Credit.

All claimants of the benefit must be over 16 or over but under the state pension age, which is 66.

It is possible to still claim Carer’s Credit if someone decides to have breaks from looking after a person, but only up to 12 weeks in a row.

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To get this retirement boost, the person the claimant is caring for must be in receipt of at least one qualifying benefit payment from the Department for Work and Pensions (DWP).

The qualifying benefits someone being looked after needs to be on for a carer to claim this support includes:

  • Disability Living Allowance care component at the middle or highest rate
  • Attendance Allowance
  • The daily living component of Personal Independence Payment (PIP)
  • Armed Forces Independence Payment

Olivia Kennedy, a financial planner at Quilter, is one of the many people who is calling unpaid carers to check if they are missing out on their full retirement.

Ms Kennedy said: “Carers play an essential role in propping up this country and it is only right that they at the very least receive a pension credit in return.

“But, despite the pandemic increasing the amount of people requiring care, the number of people applying for the credit continues to lag pre-pandemic levels.

“Unfortunately, many people fail to see themselves as carers and fail to apply for Carer’s Credit.

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“Failing to do so can have a disastrous impact on someone’s financial wellbeing as many people begin being a carer later on in life and might need the credits to get the full state pension.”

According to Ms Kennedy, recent plans outlined by the Government suggest that Carer’s Credit will be an essential lifeline going forward those close to retirement.

She added: “The Government recently finally set out its long-awaited social care plan, which applies a £86,000 cap on care costs.

“However, the detail revealed that some lower income households will now need to meet almost all of that £86,000.

“Many people will try to prevent the need to dip into family savings by caring for loved ones themselves and it’s imperative that these people still look after their own financial wellbeing and claim these important credits.”

Unpaid carers are still able to claim Carer’s Allowance from the DWP if they look after someone at least 35 hours a week who is on certain benefits.

The current rate for this benefit payment is £69.70 a week or every four weeks depending on the claimant.

Ahead of retirement benefit support may be needed by someone approaching state pension age to boost their income.

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