When you claim Child Benefit, you can also get National Insurance (NI) credits if you’re not working, or earning less than £123 a week, and this can be crucial for your state pension
An urgent pensions warning has been issued over fears up to one million families could miss out on National Insurance credits by not claiming Child Benefit.
When you claim Child Benefit, you can also get National Insurance (NI) credits if you’re not working, or earning less than £123 a week. This can be crucial for your state pension in later life, as your entitlement to the state pension depends on how many qualifying years of National Insurance you’ve built up.
Most people need 35 qualifying National Insurance years to claim the full new state pension, which is worth £221.20 a week. New figures published this week by HMRC show the number of families on Child Benefit peaked at 7.92million in 2012 – but now, just 6.91million families claim Child Benefit.
This marks a drop of one million families, who could potentially be missing out on vital National Insurance credits. Former pensions minister Steve Webb, now partner at consultancy LCP, explained how just one year of missed National Insurance credits could lead to a reduction of £329 a year in state pension, or around £6,500 over a typical 20-year retirement.
He said: “These latest figures show the dramatic impact of the High Income Child Benefit Charge, knocking a million families off Child Benefit in just over a decade. An important knock-on effect is that hundreds of thousands of parents may have missed out on vital National Insurance credits towards their state pension.
“Although the government has proposed a new way of crediting people in, we still lack important detail and there is a risk that these new credits will suffer from the same non take-up problems we see in the existing system. This issue needs to be resolved as a matter of urgency.”
The Government has promised to create a new type of National Insurance credit for families who, since 2013, could have claimed Child Benefit but did not do so. Currently, you can backdate a Child Benefit claim by three months. This is due to come into effect from April 2026, but the necessary legislation has not yet been brought forward.
