Boost Your State Pension: The Unclaimed Perk for Unpaid Carers

The UK has witnessed a significant surge in the number of unpaid carers claiming free credits to enhance their state pension, yet many who could take advantage still haven’t seized this opportunity. Here’s what you need to know about these pension-boosting credits and how they can contribute to a more secure financial future for those providing care to others without pay.

The Value of Carer’s Credit

Carer’s Credit can provide an additional £5.82 weekly, or roughly £300 annually, to your state pension. This year, there’s been an 84% increase in carers claiming these credits solely, with around 7,180 in the first seven months, as reported by financial services firm Quilter. This jump is welcome news, yet it’s a small fraction compared to the total number eligible.

Automatic Credits for Full-Time Carers

If you’re a carer for at least 35 hours a week, you qualify for the carer’s allowance of £76.75 per week, which automatically grants you pension credits. This benefit helps you accrue state pension, equivalent to a full flat rate of £203.85 weekly or an annual £10,600.

Eligibility for Part-Time Carers

For those who care between 20 and 35 hours weekly, falling short of the carer’s allowance threshold, there’s still a pathway to claim state pension credits. These credits are crucial for individuals below the state pension age, which stands at 66 years.

Claiming Your Credits

Quilter offers guidance on claiming these vital credits. Here are the basics:

  • You must be between 16 and state pension age, caring for one or more people for at least 20 hours weekly.
  • Claims can be backdated to the last full tax year. For example, a claim made by 5 April 2024 could apply retroactively from the beginning of the 2022/23 tax year.
  • If your circumstances have changed due to the person you were caring for passing away or no longer requiring care, you can still backdate your claim to the previous tax year.
  • Carer’s allowance payments can also be backdated three months, subject to conditions, and may coexist with Universal Credit.

The Government’s Role and Advice from Experts

Former Pensions Minister Steve Webb advocates for increased governmental outreach to ensure carers are aware of and claim their entitlements. With approximately 1.79 million unpaid carers of working age identified in the 2021 census, the potential claimant pool is vast.

The Current State of Care Funding

The way care is funded in the UK mandates individuals to deplete their assets, including their home, down to £23,250 for care home admission. Home care requires asset depletion to a council-determined level but excludes the home from the assessment.

Pending Reforms and Public Sentiment

Government reforms to care funding have been postponed until autumn 2025, after the next general election. These reforms aim to set a cap on individual care spending and raise the support threshold from £23,250 to £100,000. Meanwhile, the preference for in-home care over care homes is growing among the elderly.

The Cost of Care Homes and Hidden Fees

Care home living costs have surged by 11%, averaging nearly £46,000 annually in major UK cities, exclusive of nursing costs. UK Care Guide highlights 20 additional hidden costs that can add £500 monthly to care home bills, ranging from personal care to entertainment.

In conclusion, while the uptick in carer’s credit claims is a positive trend, it remains crucial for eligible unpaid carers to explore their entitlements. These credits not only provide immediate financial relief but also secure future pension income, a testament to the value of the care provided to loved ones and society at large.