Care and support

Carers and pensions - changes from April 2010

Pensions are going to be changed during the next few years.  There are two significant changes coming in next year that should help carers.

Firstly, the number of years used to calculate pension entitlement is being reduced to 30 (instead of the current 39 years for women and 44 for men). This means that carers can have gaps in their national insurance record for a number of years and not get a reduced pension as a result – as long as you don’t have less than 30 qualifying years in total.  

Secondly, carers caring for over 20 hours a week will be able to apply for a new Carer’s Credit to protect both the basic and state second pension.  This will replace the Home Responsibilities Protection (described below) and will help people who previously had difficulty protecting their state pension e.g:

• carers caring for less than 35 hours a week, who can’t get carers allowance
• carers looking after someone who is not getting attendance allowance or DLA
• carers where more than one carer is looking after someone, as only one person can claim carers’ allowance for looking after that person
• carers who might be looking after several people but can’t claim carer’s allowance as they  don’t care for any one of them for at least 35 hours.

The Carer’s Credit will replace Home Responsibilities Protection for carers and any previous HRP will be converted to years of credits for people reaching state pension age on or after April 6.

See www.direct.gov.uk/carers for information about the new Carer’s Credit
For more information about pensions in general go to www.direct.gov.uk/pensions or call 0845 6060265


Pensions – the current situation

Many carers simply don’t have the time or energy to sit down and think about things like pensions.  However you may end up with gaps in your pension record so it’s important to try and take steps now to increase your retirement income.

Contribution record

To receive a full basic state pension, you must have made a certain amount of national insurance contributions throughout your working life. Contributions are made by paying national insurance (NI) through earnings or self-employment. But if you’re unable to do this because you’re caring for children, or a disabled/ill adult, then the State will credit your contributions for you. However, this only happens if you claim the right benefits and take the right action eg you can be credited with NI if you claim carer’s allowance, jobseekers allowance or employment & support allowance.  

Home Responsibilities Protection

If you have not been earning or getting the right benefits you may be able to get Home Responsibilities Protection if you’ve been looking after a child or caring for somebody. This reduces the number of qualifying years that you will need to have paid, or been credited with, in order to get a State Pension.

You get this protection automatically for any complete tax year for which you get carers allowance, income support as a carer or you get child benefit for a child under 16
You have to apply for Home Responsibilities protection if you only qualify by spending at least 35 hours a week caring for someone who gets attendance allowance or disability living allowance  care component  (middle or highest rate)  for 48 or more weeks per year or you are a registered foster parent.  Complete the form in leaflet CF411 ‘home responsibilities protection’ available from your local jobcentre plus or HMRC office. It’s possible to backdate home responsibilities protection in some circumstances – seek further advice.

State Second Pension

There is another pension which is also built up with NI contributions and this is called the State Second Pension.  Again, if you are paying over a certain level of NI per year, or get the right benefits, your contributions are paid for you.  

Pension Forecasts

If you are a carer approaching pension age and have taken time out of employment to care for someone, you may wish to check how much pension you are likely to get and whether it is worth purchasing additional voluntary national insurance contributions to try and improve your pension.  You can get a pension forecast by calling The Pensions Service on 0845 3000168.

For more information on how to check and maximise your state pension, see Carers UK’s guide available on www.carersuk.org.uk

You can also get advice from The Pensions Advisory Service on 0845 601 2923.