Carer’s Allowance UK: How claimants can boost their pensions as carers fall behind

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Pension contributions were hit hard by the pandemic and has put many people behind in their retirement planning. Given the effects of certain lockdown rules, a range of workers in the UK have fallen behind with their auto-enrolment contributions.

Women struggle

According to recent research from Now: Pensions, nearly 300,000 more women have missed out on a workplace pension in the past year due to COVID-19 pandemic. It warned job losses, home ownership, unemployment and the financial impact of homeschooling have all had a huge impact on people’s ability to save for later life.

A total of 2.8 million people from underpensioned groups are now missing out on workplace pension saving, up from 2.5 million in 2020. Unfortunately, carers are also being hit by this.

Under-pensioned groups, which includes ethnic minorities, people with disabilities, carers and single mothers, have a private pension wealth of just 15 percent of the UK average.

Lauren Wilkinson, Senior Policy Researcher at the Pensions Policy Institute, commented: “The pandemic has provided a unique opportunity to observe how economic crises affect members of underpensioned groups.

“Developing a deeper understanding of the way in which changes in the labour market can impact future retirement outcomes of underpensioned groups can help to ensure that policies are designed to support them more effectively during the recovery from the pandemic-related economic crisis, as well as future crises and changes in the labour market, in order to achieve better retirement outcomes over the longer-term.”

Carer’s Allowance and Pension Credit

Fortunately, there is state support which can help with these issues. Carers can benefit from Carer’s Allowance which provides £67.60 per week to eligible claimants.

Where people are in receipt of Carer’s Allowance, they will also see impacts on other benefits they may be entitled to. When a person claims Carer’s Allowance their other benefit payments may change, but their total benefit payments will usually either go up or stay the same. This affects Pension Credit payments which will increase.

Pension Credit itself tops up income for retirees who are on particularly low incomes. Claimants will see their payments rise to £177.10 if they’re single, while couples will have payments boosted to £270.30.

Pension Credit applicants will get an extra £37.70 a week if they get Carer’s Allowance or have claimed Carer’s Allowance but are not being paid because they already get another benefit paying a higher amount.

Additionally, if a claimant and their partner have both claimed or are getting Carer’s Allowance, they can both get the extra Pension Credit amount.

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To be eligible for Carer’s Allowance initially, claimants must be caring for someone who is also in receipt of certain benefits. This can include PIP or Attendance Allowance.

This care must last for at least 35 hours a week and can include helping with washing and cooking, taking the person being cared for to a doctor’s appointment or helping with household tasks, like managing bills and shopping.

Carer’s Allowance claimants must also be aged 16 or over, be living in England, Scotland or Wales for at least two of the last three years and not be in full time education.

Claimants must also not be earning more than £128 after tax, National Insurance and expenses.

It should be noted, if a person gets more than £67.60 a week from a state pension, they will not get a Carer’s Allowance payment but their Pension Credit payments will increase instead.

To be eligible for Pension Credit, applicants must be living in England, Scotland or Wales and have reached state pension age.

Where claimants are in a couple, they must include their partner on their application. They’ll be eligible if either they and their partner have both reached state pension or one of them is getting Housing Benefit for people over state pension age.

Pension Credit is designed to help claimants cover their living costs which includes rent and service charges.

Additionally, Pension Credit can help with other areas, such as providing discounts on Council Tax, getting free TV Licences and helping with NHS treatments.

Benefits calculators

Evidently, finding out what support one can get can be complicated, but benefit calculators are available to help with this. These are free-to-use and can be found online.

These calculators are independent of Government and can help users find out what benefits they could get, how to claim and how their benefits will be affected if they start work.

While the Government does not offer these calculators directly, there are a number of organisations it highlights for having suitable services. This includes:

  • Policy in Practice – for information on income-related benefits, tax credits, contribution-based benefits, Council Tax Reduction, Carer’s Allowance, Universal Credit, how these are calculated and how your benefits will be affected if you start work or change your working hours
  • entitledto – for information on income-related benefits, tax credits, contribution-based benefits, Council Tax Reduction, Carer’s Allowance, Universal Credit and how your benefits will be affected if you start work
  • Turn2us – for information on income-related benefits, tax credits, Council Tax Reduction, Carer’s Allowance, Universal Credit and how your benefits will be affected if you start work or change your working hours

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