Campaigners say the current system is unfair
Changes to the state pension are set to cost thousands of people significant sums of money in government support. Around 26,000 unpaid carers in the UK could be losing a combined £182million due to the state pension age rise.
The state pension age is the earliest you can start receiving state pension as well as other pension-age benefits from the DWP. For unpaid carers, this will mean they need to wait another year before claiming the pension-age equivalents of their current carer benefits. According to Carers UK, this could lead to around £7,011 shortfall in the extra year they have to wait.
An estimated 26,000 carers who cannot work because of their caring responsibilities will face this extra wait. This equates to around £134.82 a week they will be missing out on compared to unpaid carers who have already reached state pension age.
Analysis from Carers UK showed that before they reach state pension age unpaid carers may be eligible for Carer’s Allowance and Universal Credit Carer Element worth around £136.68 per week. However, after hitting state pension age they could qualify for Pension Credit Carer Addition worth around £273.50 per week.
The charity also warned this could disproportionately affect women, who make up 63% of those between 60 and 66 who receive Carer’s Allowance. Carers UK is calling for a review of Carers Allowance to ensure it meets carers’ needs. It is also recommending that carers receive an enhanced payment at least two years before retirement to reduce the impact of poverty in later life.
Emily Holzhausen CBE, Director of Policy and Public Affairs, said: “Thousands of unpaid carers provide essential support to family and friends long before reaching pension age. As one of the most under-pensioned groups in the UK, many have little choice but to care due to limited alternative support.
“We must ensure carers are properly supported as they approach retirement, particularly given the new rise in the State Pension age. This change means that those nearing retirement age will lose out significantly, especially women, who make up the majority of those affected.
“It is vital that Carer’s Allowance is reviewed and strengthened, including enhanced support in the years before reaching pension age, so that those who dedicate their time to look after others are not left in poverty.”
People who were born between 6 April 1960 and 5 March 1961 will be directly affected by the phases of a rising state pension. People born during this period will reach state pension age after their 66th birthday but before their 67th birthday.
The date they reach state pension age will depend on the exact date they were born. Everyone born after 5 March 1961 will reach state pension age when they turn 67.
People born after 6 April 1978 are expected to have an even higher state pension age of 68 as the state pension age is due to rise again around 2044. The state pension age rises in line with life expectancy rates as a way to ensure every generation spends the same proportion of their life in retirement.
The government has previously defended increasing the state pension age. Periodically it comes under review as assessments are made of life expectancy and other factors, government paperwork shows.
