State pension age rise costs UK households £7,011 each from April | Personal Finance | Finance

A state pension age rise is set to cost more than 25,000 UK households as much as £7,000 starting this month. A warning has been issued by charity Carers UK over the knock-on effect of the state pension age increase from 66 to 67.

The change is being phased in incrementally between April 2026 and March 2028. Rather than a hard cut-off, those due to get their state pension are seeing their qualifying age move one month at a time until the age is 67 for everyone by 2028. But Carers UK says the change in state pension age will have an unintended consequence for unpaid carers, many of whom don’t work because of their caring responsibilities.

It says the pension age rise will cost about 26,000 unpaid carers £7,011 a year each, or £134.82 per week.

Emily Holzhausen CBE, Director of Policy and Public Affairs at Carers UK, said that a working-age carer receiving Carer’s Allowance, the Carer Element and Universal Credit is entitled to £138.68 per week, compared with £273.50 for a carer who has reached state pension age.

Many unpaid carers devote a significant amount of time to caring, and to qualify for Carer’s Allowance, they must provide at least 35 hours of care per week. Without the right support, the demands of this role often lead carers to cut back on working hours or to leave paid employment entirely, she said.

Carers UK is calling for a review of Carer’s Allowance to ensure it meets carers’ needs and is recommending that carers receive an enhanced payment at least two years before retirement to reduce the impact of poverty in later life.

Holzhausen said: “Thousands of unpaid carers provide essential support to family and friends long before reaching pension age. As one of the most under-pensioned groups in the UK, many have little choice but to care due to limited alternative support.

“We must ensure carers are properly supported as they approach retirement, particularly given the new rise in the state pension age. This change means that those nearing retirement age will lose out significantly, especially women, who make up the majority of those affected.

“It is vital that Carer’s Allowance is reviewed and strengthened, including enhanced support in the years before reaching pension age, so that those who dedicate their time to look after others are not left in poverty.”

Today, the government announced that tens of thousands of unpaid carers affected by confusing guidance on their earnings are set to have their debts reduced, cancelled, or refunded, in a major reassessment of cases launched by the government.

The move follows ministers’ acceptance of 38 of the 40 recommendations made by the independent Sayce Review into Carer’s Allowance overpayments in November 2025.

From April 2015 to September 2025, guidance on how to average irregularly fluctuating earnings was unclear and did not accurately reflect the law.

Carers juggling paid work alongside at least 35 hours of unpaid caring built up debts without realising they had exceeded the weekly earnings limit. That was a failure of the system, and this government is taking action to put it right.

The DWP will now review over 200,000 cases. Around 25,000 carers could see their debts reduced, cancelled entirely, or receive refunds where money has already been repaid. In most cases, DWP holds all the information it needs. Carers do not need to contact DWP — the department will get in touch if it needs anything further.

The change comes after the government increased the Carer’s Allowance cliff edge to £204 per week from this April, which means some unpaid carers can now earn around £10,000 a year and still receive the benefit.

Work and Pensions Secretary Pat McFadden said: “We inherited a system that left unpaid carers building up debt through no fault of their own, something we’re determined to put right.

“That’s why we accepted the vast majority of the Sayce Review’s recommendations and are now getting to work implementing them, kicking off the reassessment exercise to review cases impacted by unclear guidance.

“Carers are vital to our communities, and we are committed to taking action to rebuild their trust.”