‘Worth thousands!’ Martin Lewis shares how to reclaim missed National Insurance credits

Martin Lewis: Expert talks about National Insurance credits

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On Nihal Arthanayake’s BBC Radio 5 Live programme today, the money saving expert explained how some Britons who may be out of work or who are on low incomes can still claim National Insurance credits towards their state pension. Grandparents may be missing out on thousands of pounds in retirement.

Mr Lewis explained that if someone works and they have a grandparent looking after their child, and the grandparent does not receive National Insurance credits for this work, there is a way for these credits to be transferred to the grandparent.

The working parent signs a form that allows a grandparent, or other family member, to receive National Insurance credits for looking after the child.

This ensures any gaps in a grandparent’s National Insurance record is covered, which boosts their chances of getting the full state pension.

The money saving expert said: “You can transfer your childcare National Insurance credits to the grandparents if they are looking after your child.

“In fact, during the pandemic, even if they were virtually looking after them that would still count so that is absolutely worth looking into.”

Mr Lewis also mentioned Carer’s Credit – something he says is also “absolutely worth looking into.”

Parents are not entitled to receive Child Benefit if one spouse earns above £60,000 however he explained that a key to tip which could be worth tens of thousands pounds in retirement.

If either parents has an income of more than £60,000 a year before tax, the other will have to repay all the Child Benefit via the High Income Child Benefit tax Charge (HICBC).

They will still get paid the full amount of Child Benefit each month – or each week, if they are paid weekly.

Whichever one has the higher income will have to pay back the full amount via the tax.

People need to fill in a Self-Assessment tax return so HMRC can calculate the extra tax they will have to pay.

He continued: “Here’s the key, if you have your first child and you’re in that situation where one of you earns over £60,000, then there is often, sometimes a lower or possibly non working spouse and they don’t claim Child Benefit because they are not going to get it.

“However what you should actually do is claim Child Benefit at the zero rate – in other words claim no Child Benefit rather than not claim Child Benefit.

“The act of claiming the Child Benefit is what triggers you getting your childcare National Insurance credits.

“So if you’re looking after your child you can get National Insurance credits and it’s the claiming of Child Benefit that triggers this.

“You can claim Child Benefit at a zero rate or you can claim it and pay it back through tax.

“But if you’re not claiming it and you’ve never claimed it and you’ve got a child, you’re missing out on National Insurance years that by the time you get to retirement could be worth tens of thousands pounds in pension over your retirement life.”

Mr Lewis urged Britons to claim it even if it’s a zero rate.

If people have already claimed before and they have another child, this won’t work as it has to be for the first child, he said.

Ask Martin is available on BBC Sounds.

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