Money & Budgeting

Financial Planning for Carers UK — Money Guide

Financial support and planning for unpaid carers. Carer's Allowance, benefits, protecting your finances, pension credits, and planning for the future.

By PocketWise · · 4 min read

Caring for someone is valuable but often financially challenging. Here’s how to protect your finances while caring.

Benefits for Carers

Carer’s Allowance

Feature Details
Amount £81.90/week (2024/25)
Care requirement 35+ hours per week
Person cared for Must receive qualifying benefit
Earnings limit £151/week after deductions
Age 16+ with right to work in UK

Qualifying Benefits (Person You Care For)

They Must Receive Details
PIP daily living Standard or enhanced
DLA middle/highest care Not mobility only
Attendance Allowance Either rate
Constant Attendance Allowance Or AFIP
Armed Forces Independence Payment

Earnings Limit Explained

Gross earnings
Minus Income tax
Minus National Insurance
Minus 50% of pension contributions
Minus Allowable childcare costs
= Net earnings (must be under £151)

Important Rules

Rule Details
One carer per person Can’t both claim
One claim per carer Even caring for two
Studying Under 21 hours/week
Holiday Up to 4 weeks

Carer’s Credit

What It Is

Feature Details
Purpose Protects State Pension
Provides Class 3 NI credits
Cost Free
If not getting CA Alternative protection

Who Qualifies

Requirement Details
Care 20+ hours/week Less than CA requirement
Person receives qualifying benefit Same as CA
Not getting NI credits otherwise Employment, benefits

How to Claim

Step Details
Form CC1
Submit DWP
Backdating Up to 3 months
Ongoing Renew annually

Impact on Other Benefits

Carer Premium/Element

If You Receive You Get
Universal Credit Carer element (£198.31/month)
Income Support Carer premium
Housing Benefit Carer premium
Pension Credit Carer addition

Overlapping Benefits

Carer’s Allowance Cannot Be Paid With
State Pension Higher amount paid
Contribution-based ESA Choose one
Bereavement benefits Higher amount paid
Severe Disablement Allowance If current

“Underlying Entitlement”

Even If Not Paid You Keep
Carer’s Allowance on record For other benefits
Carer premium/element Still added
NI credits Still received

Working and Caring

Options for Working Carers

Approach Details
Part-time work Under earnings limit
Flexible working Right to request
Working from home Easier to combine
Self-employment More control
Carers leave 5 days unpaid per year

Carers Leave (From 2024)

Feature Details
Amount 5 days per year
Type Unpaid
Notice Twice the length requested
Who qualifies Employees from day one

Flexible Working

Your Rights
Right to request From day one
Employer must Consider seriously
Can request Hours, times, location
Refusal Must be business reason

Financial Planning

While Caring

Action Why
Claim all benefits Entitled to them
Track expenses Caring costs add up
Maintain NI record For State Pension
Check Council Tax Possible exemption/discount
Consider respite For your wellbeing

Council Tax

Situation Impact
Severely mentally impaired person May be disregarded
Only carers left Possible discount
Second adult rebate May apply
Always check With council

Costs of Caring

Often Overlooked Consider
Travel to appointments Mileage, parking
Additional heating Person’s needs
Special diet If required
Equipment Not provided by NHS
Lost earnings Opportunity cost

Protecting Your Future

State Pension

Action Purpose
Check NI record Gov.uk account
Claim Carer’s Credit If not getting CA
Buy voluntary NI If gaps
Know your position Years needed

Private Pension

Situation Options
Left work to care Keep pension, check options
Still working part-time Continue contributing
Self-employed Consider SIPP
No pension Consider starting small

Other Savings

Priority Details
Emergency fund For unexpected costs
Easy access savings For flexibility
ISAs Tax-efficient

When Caring Ends

Immediate Steps

Action Details
Notify DWP Carer’s Allowance continues 8 weeks
Update other benefits UC, Housing Benefit
Consider next steps Work, other benefits
Allow time To adjust

Support Available

Situation Support
Returning to work Jobcentre Plus
Need retraining Skills courses
Health problems ESA/UC capability
Retirement age State Pension

Bereavement

If Person Dies
8 weeks CA Continues
Bereavement benefits May apply if spouse
Council Tax Notify council
Other benefits May change

Getting More Support

Carers Organisations

Organisation Support
Carers UK Advice, helpline
Carers Trust Local support
Local carers centre Practical help
Turn2us Benefits calculator

Respite and Breaks

Source Options
Council Direct payments for respite
Charities Grants for breaks
Carers UK Breaks information
NHS Short-term care

Summary: Carers Financial Checklist

Benefits to Check

Benefit Claimed?
Carer’s Allowance ☐
Carer’s Credit ☐
UC carer element ☐
Council Tax reduction ☐
Pension Credit carer addition ☐

Protecting Your Future

Action Done
Check State Pension forecast ☐
Claim NI credits ☐
Review private pension ☐
Emergency fund ☐

Working and Caring

Know
Earnings limit £151/week
Allowed deductions Tax, NI, pension, childcare
Carers leave right 5 days unpaid
Flexible working right Can request

Key Contacts

Organisation For
Carers UK helpline 0808 808 7777
Citizens Advice Benefits advice
Turn2us Benefits calculator
Local carers centre Practical support

Remember

Point
Caring is valuable work Worth £162bn/year to UK
You have rights Employment and benefits
Help is available Ask for it
Look after yourself Can’t pour from empty cup

Being a carer is financially challenging, but support exists. Claim everything you’re entitled to, protect your future pension, and don’t try to manage everything alone. You’re doing important work — make sure you’re supported to do it.

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Sources

  1. MoneyHelper — Everyday money