Martin Lewis warning to Brits earning £123 a week - you may be due extra money
Martin Lewis has issued an urgent warning to anyone who is earning under £123 a week.
The MoneySavingExpert.com (MSE) founder explained in this week's MSE newsletter that 200,000 people could be missing out on National Insurance credits (NICs) when claiming Child Benefit. The amount you get in your state pension is based on the number of qualifying National Insurance (NI) years you have.
You earn these years through working - and you need 35 full years to get the full state pension. If you earn under £123 a week - so less than full time - and claim Child Benefit then you can claim NICs to top up the shortfall you would've earned if working full time.
Martin Lewis has warned that around 200,000 people are losing out on NICs because they are claiming Child Benefit under the wrong name. The recent MSE newsletter explained that Child Benefit was a payment made to parents of children under 16 - or 20 if they are in full time education - and it is worth up to £24 a week.
He noted that the lower-earning parent needed to be the one who applied for Child Benefit as if they earn under £123 a week then they will be the one who receives the NIC. This will help boost their state pension entitlement which the higher-earning partner may not have benefited from.
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Martin said: "Even if you're earning too much to get financial help, the parent named on the form gets State-Pension boosting National Insurance credits. So make sure the lower-earning member of the couple is the one to apply - if they're earning under £123 a week, they'll get a National Insurance credit they wouldn't have otherwise. If you're already claiming in the higher earner's name, you could be one of 200,000 parents HM Revenue & Customs says is losing out. All you need to do is fill in a form to transfer the credits over to the lower earner."
In a previous episode of the ITV Martin Lewis Money Show, Martin said that having the "wrong" parent apply for Child Benefit could cost them £10,000s in retirement. He said: "There are 200,000 of you out there who are missing out on thousands, or potentially tens of thousands of pounds of state pension because the wrong partner in your relationship is getting the National Insurance credits."
With Child Benefit, it's important to know of the High Income Child Benefit Charge (HICBC). If you earn £50,000 a year or under, then you can claim the full entitlement of Child Benefit. This figure only applies to individuals and not to couples - so if you are in a couple then both of you can earn up to £50,000 and still claim - although only one parent can claim the benefit.
If you earn over £50,000 a year, you will still get the full amount of child benefit - but you will have to pay some of it back. This is the High Income Child Benefit Charge. So if you earn over this, you have to pay back 1% of the Child Benefit you get for every £100 earnt above the £50,000. For example, if you earn £55,000 a year, you'll pay back 50%. Those who earn £60,000 or more have to repay all of their Child Benefit.
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