Thousands of households across the UK are missing out on a significant opportunity to boost their state pension income, with a little-known Department for Work and Pensions (DWP) benefit potentially adding hundreds of pounds each year to retirement funds.
What is Carer's Credit and How Does It Work?
The DWP's Carer's Credit is a National Insurance (NI) credit designed specifically for unpaid or low-paid carers. Its primary function is to prevent gaps in an individual's NI record that can occur when they reduce their working hours or stop work entirely to provide care.
To receive the full new state pension, currently valued at £230.25 per week or £11,973 per year, you typically need to have accumulated 35 years of National Insurance contributions. You only earn these contributions through work if your annual earnings exceed £12,570.
Carer's Credit effectively fills these contribution gaps for those providing substantial care, potentially increasing their annual state pension by up to £342. Over a typical retirement, this could amount to a total boost of more than £6,000.
Who Qualifies for This Pension Boost?
To be eligible for Carer's Credit, you must meet specific criteria. You need to be aged 16 or over but under the current state pension age of 66. Crucially, you must be caring for someone for at least 20 hours per week.
The person you care for must also be receiving one of the following qualifying benefits:
- Disability Living Allowance (at the middle or highest care rate)
- Attendance Allowance
- Personal Independence Payment (the daily living part)
- Armed Forces Independence Payment
- Child Disability Payment (middle or highest care component)
- Adult Disability Payment (standard or enhanced daily living rate)
- Pension Age Disability Payment
- Constant Attendance Allowance
Why Are Thousands Missing Out?
It is estimated that a vast number of people are completely unaware that Carer's Credit exists. This lack of awareness means many individuals who have selflessly taken time out of their careers to look after family members or others are inadvertently building gaps in their National Insurance record.
These gaps can significantly reduce the state pension payments they receive later in life. The credit is a vital mechanism to ensure that those contributing to society through unpaid care work are not financially penalised in their retirement.
If you are providing care for someone and meet the criteria, it is essential to investigate your eligibility for Carer's Credit. Taking action now could secure a more comfortable and financially stable retirement, recognising the valuable contribution you make as a carer.
