06 March 2024 , 09:22
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Martin Lewis has issued a warning as around 200,000 people could be "losing out" due to the Child Benefit rules.
The MoneySavingExpert.com founder urged Brits to check which partner is claiming Child Benefit as the thousands could be missing out on free state pension top-ups. The amount a person gets in their state pension is based on the number of qualifying National Insurance (NI) years they have.
You build up their qualifying years by working and you typically need around 35 years to receive the full amount. If you earn under £123 a week, so less than full time, or you are not working and get Child Benefit, then you can claim National Insurance Credits to top up the shortfall you would've earned if working full time.
These credits then build up your qualifying years so you will receive the full state pension when you reach the state pension age. However, you can only claim the credits if you are claiming Child Benefit and only one parent can claim it. Martin told readers that the "lower earning" parent should be claiming as they will benefit more.
He said: "Often it should be the lower-earning member of the couple who applies, as if you are earning, or ever earn, under £123/wk, you'll get an NI credit you wouldn't have otherwise, potentially boosting your future state pension, which can add up to £10,000s over the years."
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If you need to change the person claiming Child Benefit, Martin noted that you can fill in a form on Gov.uk to transfer the credits over to the lower earner. You can either do it all online, or you can fill in the form online and then print and post it. If you transfer the benefit, you can potentially backdate your claim - meaning the lower-earning partner can collect their National Insurance Credits from previous years.
The MSE newsletter shared the success story of one man called David who shared that Martin's advice helped top up his wife's state pension by £3,000 - saving them around £7,000 in buying voluntary contributions. He said: "My wife has a low-paid job, so doesn't contribute to National Insurance leaving her state pension record with a 10-year gap.
2We'd been thinking about making voluntary contributions, then I read your Child Benefit article and realised as I'd been claiming it, I could transfer all the Child Benefit credits to my wife. She got 10 years' worth of free NI credits, which would have cost us approx £7,000. A huge weight off our minds. Thanks."