As the new tax year commences, a set of beneficial changes for carers and pensioners has been rolled out, allowing them more financial flexibility and support. This shift not only acknowledges the crucial role that these groups play in society but also aims to ease the burden many are facing in light of rising living costs.
Starting with the changes for carers, one significant aspect is that they can now work longer hours without jeopardizing their vital benefits. Specifically, the carer’s allowance, which provides essential financial support, will be positively affected by these policy adjustments. This year, carers are experiencing a notable benefit increase of 1.7%, although this adjustment is outpaced by the broader cost of living increases, currently measured at approximately 2.8%. Therefore, while they receive a modest increase, the overall financial landscape continues to be squeezed.
In detail, the standard allowance of Universal Credit, a primary benefit, has increased by £5.30 monthly, rising to approximately £317 for single individuals under 25 years. For couples over the age of 25, the monthly increase stands at £10.50, resulting in a total of £628 monthly. Furthermore, other critical benefits, including Personal Independence Payments and Attendance Allowance, are also rising by 1.7%. Stephanie Swann, a carer from Stockport, who looks after her son Joseph, who has cerebral palsy, highlights the importance of these changes. She notes that the increase allows her to work an extra couple of hours weekly without risk to her allowance, offering her not only financial relief but also a sense of identity and purpose through employment.
Moreover, the threshold for earning alongside claiming the carer’s allowance is set to rise significantly. Carers will now be able to earn up to £196 weekly, up from the previous limit of £151, all while retaining their allowance, which has increased to £83.30 per week. This change is expected to affect around 60,000 additional carers by the year 2029, which adds a further dimension of support to this exemplary group within society.
On the topic of pensions, the state pension has been positively adjusted by an impressive 4.1% under the government’s triple lock policy, which ensures that pensions are raised alongside the highest out of inflation, wage growth, or a specific minimum rate. For those qualifying, this increase results in a new total of £230.25 weekly for the full flat-rate pension and a £176.45 weekly allowance for the basic state pension. These are substantial yearly increases, translating to £472 and £363 respectively.
Work and Pensions Secretary Liz Kendall emphasized the government’s firm commitment to this triple lock, ensuring pensioners have the financial security they desperately need. However, alongside these positives, there remains a concern regarding the freeze in income tax thresholds, a situation deemed as “fiscal drag.” While tax rates are not rising, the thresholds where these rates apply are frozen until 2028. Consequently, as individuals receive pay raises, they may inadvertently find themselves affected by higher tax rates, potentially creating financial strain despite nominal income growth.
Overall, the changes ushered in with the new tax year represent a modest step forward for both carers and pensioners. However, this advancement occurs against a backdrop of ongoing cost-of-living crises, rendering these increases crucial yet insufficient alone. Continued advocacy and policy adjustments will be necessary to ensure that the most vulnerable members of society can maintain their well-being and dignity in an increasingly expensive environment. The government’s acknowledgement of their contributions signifies a recognition of their importance, but more work is indeed needed to address the realities they face daily.