Got kid(s)? You must sign up to child benefit for them, even if you’re not eligible, or risk losing thousands of pounds of your state pension later in life. It sounds crazy but if you don’t register, the tax man doesn’t know you have children. And if you take time out to look after them, you won’t get the pension credits which take the place of the national insurance contributions you would’ve made from your pay packet.
This is hugely important because every year of NI contributions missed equals £5,000 less of your state pension.
Normally new mums get a ‘bounty pack’ after the birth which contains the child benefit forms. This is your chance to sign up.
But many mums are not bothering because, since January 2013, complicated changes mean that child benefit is clawed back in families where one parent is earning over £60,000 a year.
Others with school-age children, like myself and Mr Minted, might also have surrendered their claim rather than face the paperwork.
They don’t realise that they are losing so much pension money in doing so.
The NI credits are available to women claiming child benefit for a child under 12. So that’s potentially 12 years of pension credits lost, pretty significant when you need 35 years of credits or NI contributions to claim the full state pension.
I recently checked whether I was missing out by going to www.gov.uk/check-state-pension where you can order a summary of your credits and contributions. It arrived by post after a few days. Mine, amazingly, didn’t have any empty years but others may. If you have gaps in your record, don’t hesitate. The time to plug them – or contest them – is now!
There’s more about child benefit at www.gov.uk/government/collections/child-benefit-forms. The calculations were done by Royal London.