State pension UK: DWP urged to address ‘unwieldy’ carer system in Queen’s speech

Martin Lewis outlines pension scheme for 16-21 year olds

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State pension income can be built and protected through carer’s credit claims, which can help fill gaps in a person’s National Insurance (NI) record. To be eligible for state pension payments, a person will need at least 10 years of NI contributions, with 35 years needed for the full amount of £179.60 per week.

The Government encourages people to claim these pension protecting benefits where possible but a Freedom of Information request by Quilter showed many people are not getting the message.

Their insight showed just 5,209 people claimed carer’s credit in 2020 , a drop from 6,489 claims in 2019.

This is despite the increasing number of people who became unpaid carers during the pandemic.

In June last year figures showed the number of unpaid carers had increased by an estimated 4.5 million to 13.6 million, according to six charities supporting Carers Week.

Quilter went on to highlight how costly this could be: “Only 20 percent of the approximate overall eligible population have claimed the credit to date as just 40,673 carers have claimed.

“In 2015 the Department for Work & Pensions estimated around 200,000 carers are eligible, with women making up a substantial proportion.

“It is expected this number has increased since 2015.

“Those who do not get a carer’s allowance but do care for someone may be eligible for carer’s credits that count towards a person’s state pension entitlement.

“You must be between 16 and state pension age and look after one or more people for at least 20 hours a week. Anyone unsure whether they qualify can apply using the downloadable form from the DWP website.

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“Each annual credit missed could cost you 1/35th of the value of the state pension – around £260 per year or £5,200 over the course of a typical 20-year retirement.”

Olivia Kennedy, a financial planner at Quilter, commented on these figures: “In this unprecedented year it is inevitable that we will have seen a dramatic increase in the already sizable unpaid carer population.

“Throughout the pandemic they have continued to prop up support services.

“However, these people sometimes don’t even recognise themselves as carers or the extent of the sacrifice they are making.

“Thinking of their own long-term financial wellbeing is crucial and the state pension is a big part of that, particularly as it’s money they rightfully deserve.

“An update on the elusive Social Care White Paper is anticipated in the upcoming Queen’s Speech.

“This long-awaited policy reform needs to take into account the substantial work unpaid carers do and ensure they are getting all the resources and support they deserve as a result.”

Olivia concluded by highlighting what changes needed to be made to amend these issues: “The current system for state provided social care is not fit for purpose.

“Any new system needs to go a long way to clarify who can claim funds and how to go about it, given it is so complicated and unwieldy.

“There are several different models, each with their positives and negatives but the main thing is a clear and easily articulated policy that is easy to access at the point of need for our most vulnerable people.

“No matter what system is chosen we will have to accept the distinct possibility of some tax increases if we want to pool our risk and share the cost of an ageing society. People also need to understand that any policy is likely only to fund a basic level of care.

“Anybody that wants more than the minimum provision needs to think about setting aside some money or insuring themselves to provide for their potential care needs if they want to be able to afford a more comfortable care facility should they need it.

“Don’t assume that just because you pay National Insurance that you will be covered with a comprehensive social care service like the healthcare provision we have from the NHS. Public social care services are likely to be set up to provide a basic minimum standard of care.”

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