The impact of the pandemic has resulted in a sharp rise in the number of unpaid carers. In fact, an estimated 4.5 million people in the UK fell into the role, making it increasingly difficult to keep up with household bills and balance work commitments. Therefore, it will come as a relief that Carer’s Allowance is set to increase in April!
However, the allowance increase comes with a hidden catch that could leave many carers with a tough decision to make. Here’s everything you need to know about the changes.
[top_pitch]
Carer’s Allowance to increase by £2 per week
From 11 April, Carer’s Allowance will increase by an estimated £2 per week. The total increase will be 3.1%, in line with the current CPI and will see rates rise from £67.60 per week to £69.70 per week. Therefore, carers could receive £278.80 per month.
The government proposed changes to the allowance back in 2021 as inflation continued to rise in the UK. A 2021 survey by Carers UK revealed that one in five carers worry about coping financially in 2022. It is hoped that the increased Carer’s Allowance will relieve these worries.
What’s the catch?
Carer’s Allowance will rise in line with the CPI. However, the government has not taken into account the recent increase in the National Living Wage. As a result, some carers may have to sacrifice working hours in order to receive the allowance.
The previous National Living Wage was £8.91 per hour. On this wage, carers could work for 14.36 hours a week and still receive the Carer’s Allowance. Nevertheless, the National Living Wage has since increased to £9.50 per hour, which means that carers will need to cut down their working hours in order to receive the allowance.
This presents a tough decision for unpaid carers and could make it increasingly difficult for them to find work.
[middle_pitch]
Alternative ways to improve your finances as an unpaid carer
If cutting back your working hours isn’t an option, unpaid carers may need to find alternative ways of beating inflation. An increase in the National Living Wage presents a great opportunity for carers to boost their savings and improve their finances. Here are some suggestions for making the most of your money in 2022.
Invest in a high-interest savings account
As an unpaid carer, you never know when you might be in need of a little extra cash. Consequently, you should consider putting any extra income into a high-interest savings account. These accounts allow you to grow your wealth passively and secure a stronger financial future.
Take a look at our top-rated savings accounts that can help to grow your money and help you to stay on top of rising prices.
Start a side hustle
If you struggle to fit in office hours around your caring duties, a side hustle could be the best option for you. There are a number of excellent side hustles that can be done from home and don’t require a set time commitment. This means they can be done in the small pockets of time that you may have available throughout the day.
Side hustles can easily be scaled into a full-time income if you find you have more time in the future. Starting your own side hustle is a great way to earn money around your caring duties.
Use a rewards credit card
If you find yourself using credit in order to stay on top of payments, you should consider choosing a card that offers rewards. Rewards credit cards offer discounts and incentives whenever you spend. Over time, these could add up and provide you with savings on your monthly expenses.
Of course, you should always be careful to pay off your bills in time and only borrow as much as you can afford to pay back.
