CARERS have come into focus in recent months as a caring crisis continues to plague the Government and the economy. The issue was explored tonight in the latest episode of Inside the Care Crisis with Ed Balls.
CHRISTMAS bonuses will be issued to benefit claimants in the near future, so long as they’re claiming their benefits during a specific period. This includes claimants of Carer’s Allowance, which may prove to be crucial for millions of struggling carers.
‘OVERLOOKED and undervalued’ Britons could be eligible for an extra monthly payment of £270 on top of their existing benefits from the Department for Work and Pensions . A recent study carried out by the University of Strathclyde determined that unpaid carers are not compensated enough for the difficult work they do. As of this year, some carers in the UK may be eligible for extra financial support on top of their DWP Carer’s Allowance payment.
THOUSANDS of British people could be entitled to claim up to £114.10 a week Employment and Support Allowance if they have an illness or mental health condition that affects their ability to work. The Department for Work and Pensions advised that this money is available for people who have limited capability for work but it’s thought that thousands of Britons are missing out.
Pension reforms are always anticipated by experts, particularly near to major fiscal events such as the Budget. Before the Chancellor Rishi Sunak’s Budget this year, many Britons were looking at their pension pots, taking action to ensure they were not affected by rumoured changes. Ultimately, Mr Sunak announced a freeze to the Pension Lifetime Allowance at its current level of £1,073,100, until April 2026.
However, with the so-called ‘Freedom Day’ now pushed back, and variants of COVID-19 spreading, there are concerns about the financial future for the UK.
After a challenging year and a half, reports from The Telegraph have suggested Treasury officials are looking at a “pension tax raid”.
According to sources from Whitehall, the measure is being considered due to pressure on the public purse after the pandemic.
A number of different methods have bene discussed with regards to potential pension changes in the future.
As pensions increase in value over time due to compounding, people may find themselves drawing particularly close to the threshold, and even tipping over it.
This could have a particular impact on a person’s retirement cash, and thus their plans for later life.
Speaking previously to Express.co.uk, Christine Ross, Head of Private Office (North) at Handlesbanken Wealth Management, commented on what a Pension Lifetime Allowance changes could mean.
She said: “More and more people are going to get near to the Lifetime Allowance in the next few years, perhaps even without realising it.
“It’s important to note we aren’t just talking about extraordinarily high earners, here, we’re talking about people who have spent time in upper-middle management.”
Ms Ross highlighted career pathways such as headteachers, deputy headteachers, heads of department, and other white collar professionals who may be impacted.
Indeed, those who have defined benefit pension arrangements, which are usually based on years of service and salary may also be impacted.
She added: “The Lifetime Allowance is frozen at £1,073,100, which may seem like an odd number, and that is going to be frozen for the next five years.
“If that had been increased with inflation, that allowance would’ve risen by £88,900 if we took a view for inflation over the next five years.
“Now, let’s say somebody is right on the Lifetime Allowance and their investments continued to grow at the same level – effectively they will pay 55 percent tax on £88,900. That is the impact on somebody of the Lifetime Allowance being frozen.”
Steven Cameron, pensions director at Aegon, added: “Today’s speculation highlighted the possibility of a further cut to the pensions lifetime allowance.
“Given this was frozen at the recent Budget any further change would be particularly punitive. The current allowance only buys an annual guaranteed income of around £1,700 a month, which is hardly going to buy a life of luxury.”
Express.co.uk has contacted the Treasury for comment on the matter.
To be eligible for carer’s allowance initially, a person must provide 35 hours of care a week which can include helping with cooking, taking the person being cared for to a doctor’s appointment or helping with household tasks.
Claimants must also be aged 16 or over, have been living in England, Scotland or Wales for two of the previous three years and earn £128 or less per week after tax, National Insurance and expenses.
On top of this, claimants must not be in full-time education, studying for 21 hours a week or more to be subject to immigration control.
For those who are not eligible for carer’s allowance, it may be possible to apply for carer’s credit instead.
Carer’s Allowance is a payment a person may be able to get if they provide 35 hours per week of care for someone who gets certain benefits. The full list of benefits can be found under the eligibility section on the Government website, and it includes Attendance Allowance or the daily living component of Personal Independence Payment (PIP).
There are also eligibility rules surrounding the carer themselves, which are also available to read on the Government website.
A person doesn’t need to be related to or living with the person they care for in order to qualify, however.
Should an individual care for more than one person though, they won’t get paid extra.
Furthermore, if another person also cares for the same person, it’s important to note only one of the carers could be able to claim Carer’s Allowance.
And, for some, it could be their ISAs – which stands for Individual Savings Account and is a way of saving tax-free – are to become increasingly important.
Commenting on the freezes to pension allowances, he said: “For savers at risk of breaching the pensions life time allowance, it is more important than ever to maximise ISA allowances as part of their retirement savings plans.
“Don’t forget that married couples have two sets of ISA allowances that can be used, so £40,000 a year.
“While ISAs don’t offer the upfront tax relief of a pension contribution, they are more flexible and there is no tax to pay when you draw upon them.