DWP wants people to claim little-known benefit that could boost pension by £328 a year

Millions of households are being urged to claim Carer's Credit, a benefit that could boost State Pension by up to £328 a year. This call is specifically targeted at unpaid carers who don't earn enough to make National Insurance contributions and may not be eligible for a full State Pension.

Pension qualifications require at least 10 years' worth of National Insurance (NI) contributions, with 35 years needed to receive the full amount of £221 weekly. Brits can claim free credits to fill gaps created by career breaks before voluntarily buying back any missing years.

Experts at Mobilise, a community for unpaid carers, are encouraging the UK's 10 million carers to apply for 'carer's credit' to ensure they have access to the full new state pension. Carer's credit ensures any years where you're not paying national insurance due to time spent caring are still counted.

The scheme assists unpaid carers in continuing to build up towards that 35-year target. Each annual credit missed could cost you 1/35th of the value of your state pension, according to wealth manager Quilter.

By claiming the credit, you could potentially increase your state pension by £328 annually - adding up to over £6,000 over the course of a typical retirement, reports the Manchester Evening News.

Suzanne Bourne, care expert at Mobilise, spotlighted the severe impact caring can have on future pensions: "If you start work at 21 and stop working at 51 to care for your partner, you will only receive a partial state pension when you turn 66."

Highlighting a potential financial surprise, she suggests leveraging carer's credit for mitigation, saying, "We're encouraging everyone to check whether they are eligible as soon as possible."

Bourne further explained that backdating carer's credit is possible to the start of the last tax year – a crucial point for those who might delay applying even when the person cared for no longer needs help, or has passed away. "So it's vital that you don't leave it too long to submit your application, if you think you're eligible."

She recommends reviewing your National Insurance record before claiming, adding, individuals should inspect any gaps by checking their state pension forecast. This can be done online through the government's 'Check your State Pension' tool here or on the HMRC app found on the Apple App Store and Google Play Store. To log in, you'll need your Personal Tax Account details. If you don't have an HMRC account, you can register at gov.uk.

The tool provides information on how much your state pension could increase and what additional NI years or free credits are needed. Before making a voluntary contribution, it's crucial to check if the gaps in your contributions can be filled with free National Insurance (NI) credits.

For example, carer's credits can help fill in gaps in your NI record if you're an unpaid or low-paid carer. To qualify for carer's credit, you must be aged 16 or over, under state pension age (66), and looking after one or more people for at least 20 hours a week.

The person you're caring for must receive one of several specific benefits. Thousands are believed to be missing out on these NI Credits, which could leave them worse off in retirement. You can check the full list of people eligible to claim credits by visiting here. It details the circumstances where you'll need to claim and when you'll get it automatically.

If you don't qualify for free NI credits in some cases, buying back missing years can be really valuable. However, voluntary contributions come at a cost. If you fill gaps between 2006/07 and 2015/16, you'll pay the 2022/23 rates for contributions.

The voluntary pension contribution is valued at £15.85 per week, equating to an annual cost of £824.20 for a year's worth of contributions. With the state pension currently standing at £185.15 per week in 2022/23, this additional contribution would boost your weekly pension by £5.29, or roughly £275 annually.

Although the upfront cost would be £8,242 (10 payments of £824.20), the yearly increase to your state pension would be around £2,750. Over a retirement period of 20 years, this could result in a total return of about £55,000 before tax.

Voluntary pension contributions can be made by anyone under the age of 73, as it's assumed that everyone below this age will claim the new state pension. If you're yet to reach the state pension age, you can check your state pension forecast here to see if making voluntary contributions would be beneficial for you.

Alternatively, you can contact the Future Pension Centre on 0800 731 0175. For those who have already reached the state pension age, the Pension Service can provide information on whether voluntary contributions would be advantageous. They can be contacted via several methods listed here. Typically, voluntary contributions can be made for the previous six years, with the deadline being April 5 each year.

For example, to cover gaps in the tax year 2023 to 2024, you have until April 5, 2030. The deadline for making voluntary contributions for the tax years 2016 to 2017 or 2017 to 2018 has been extended until April 5, 2025. You can find information on how to make these contributions here.