New rules on state pensions

Some of Britain’s six million carers will find it easier to build up a state pension from April, when new rules come into force.

Hundreds of thousands of carers don’t currently qualify for credits towards their state pension, but that’s about to change.

Many people – mostly women – fail to qualify for a full basic state pension because they don’t pay enough National Insurance contributions. And one of the biggest groups to lose out are carers. If you give up work to look after your children, you can effectively get credited for those years, but under the current system, it’s much harder for carers to qualify. They need to claim a benefit called Carer’s Allowance to trigger credits for National Insurance contributions, which many carers aren’t entitled to receive. But from April 6th, the rules will change and anyone caring for someone for 20 hours a week or more will get credits towards their state pension.

Why the change matters
At the moment, many carers don’t get the chance to make enough National Insurance contributions to get a full basic state pension.

• Currently, women have to have paid (or been credited with) 39 years’ NI contributions, while men have to have paid 44 years’ NI contributions to qualify for the full basic state pension.

From April 6th, as part of a wider overhaul of the state pensions system, men and women will only have to have paid or been credited with NI contributions for 30 years to qualify for a full basic state pension.

• Many carers lose out on a basic state pension because they must be eligible for Carer’s Allowance before they are credited with NI contributions through Home Responsibilities Protection. And Carer’s Allowance is only paid if you care for someone for 35 hours a week or more and they claim benefits such as Attendance Allowance or Disability Living Allowance at the middle or highest rate.

Carers haven’t just lost out when the person they’ve been caring for hasn’t been eligible for or has refused to claim benefits, they’ve also failed to qualify for credits towards their pension when several people have been caring for someone and one of the other carers has claimed Carer’s Allowance or because they’ve looked after several people, but have not cared for any one of them for 35 hours a week or more. You can download a booklet on claiming Carer’s Allowance from the Directgov website. Alternatively, you can call a special helpline provided by the carers’ charity Carers UK on 0845 608 4321 or Textphone on 0845 604 5312.

Who will benefit
The changes to state pension rules could benefit hundreds of thousands of carers. Make sure you (or someone you know) don’t miss out because you’re not aware of how the new rules will help:

• From April 6th, you will be eligible for the new Carer’s Credit if you care for someone (or several people) for 20 hours a week or more in total as long as they receive Attendance Allowance or Disability Living Allowance at the middle or highest rate or a medical professional is able to confirm that you are providing appropriate care for them.

The ‘medical professional’ can be either a social worker or your family doctor. All they have to do is fill in a form to confirm that you are acting as a carer for 20 hours a week. There’s some useful information for carers on the Directgov website.

Gaps in your NI contributions record
If you have gaps in your National Insurance contributions record because of years spent as a carer, you have several options:

• If you’ve already retired: make sure you claim the Pension Credit.

• If you’ve not yet retired: consider making voluntary National Insurance contributions, but take advice because in some situations, it could be wasted money.

It’s not necessarily the case that everyone who has an incomplete National Insurance record should buy additional years. The Pensions Advisory Service has information on how to go about making additional NI contributions. It’s an independent, non-profit organisation that provides information and guidance on state pension matters. You can also call its helpline for advice 0845 6012923.

Useful links
Carers UK: This site has lots of useful information for carers including details of the state pension changes.

The Princess Royal Trust for carers: provides carers’ support services.
Crossroads Care support for carers and the people they care for.