This is due to the demographic failing to have National Insurance contributions, or credits, which go towards their entitlement to state pension payments. A Freedom of Information (FoI) request, sent out by Quilter, has found that only 4,759 people claimed carer’s credits in 2021. These credits are vital to many Britons as they count towards someone’s state pension entitlement.
Due to unpaid carers being out of the workforce, they are unable to make National Insurance contributions and rely on pension credits to make up the difference.
To get the full state pension, the average person needs around 30 years of National Insurance contributions under their belt.
National Insurance is a levy that comes out of someone’s pay cheque and goes towards their benefit entitlement.
The data from Quilter’s FoI was backdated from November 8, 2021, with Quilter estimating the number of carer’s credits claimed by the end of that year to be just 5,568.
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This is only slightly above the prior year’s claim amount of 5,221, however it is still 13 percent below pre-Covid levels.
According to Government forecasts, 4.5 million extra people have become unpaid carers since the pandemic.
Before Covid, 9.1 million unpaid carers were already operating and looking after loved ones in the UK.
Around 20 percent of those eligible for the pension credit have taken it on, with only 44,285 carers making claims for credits.
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Back in 2015, the Department for Work & Pensions (DWP) estimated that an estimated 200,000 carers are eligible.
It is likely this number has increased since 2015 with women making up the majority of those who are eligible.
Olivia Kennedy, a financial planner at Quilter, noted the “essential role” that unpaid carers have played over the past two years and why they deserve a healthy retirement.
Ms Kennedy explained: “Carers play an essential role in propping up this country and it is only right that they at the very least receive pension credit in return.
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“But, despite the pandemic increasing the amount of people requiring care, the number of people applying for the credit continues to lag pre-pandemic levels.
“Unfortunately, many people fail to see themselves as carers and fail to apply for carers credit.”
The finance expert emphasised how unpaid carers are at a disadvantage if they do not apply for carer’s credits.
Citing the Government’s social care plans, Ms Kennedy warned of the future costs awaiting carers in the near future.
She added: “Failing to do so can have a disastrous impact on someone’s financial wellbeing as many people begin being a carer later on in life and might need the credits to get the full state pension.
“The Government recently finally set out its long-awaited social care plan, which applies a £86,000 cap on care costs.
“However, the detail revealed that some lower income households will now need to meet almost all of that £86,000.
“Many people will try to prevent the need to dip into family savings by caring for loved ones themselves and it’s imperative that these people still look after their own financial wellbeing and claim these important credits.”
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