Parents can boost state pension entitlement by thousands – are you making simple mistake?

Martin Lewis explains who is eligible for Child Benefit

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This is because when the child benefit is claimed by a working parent, the non-working parent won’t be getting National Insurance Credits that they are entitled to.

This can mean they fail to qualify for the full state pension and therefore lose out on future state pension income.

With the state pension making up over half of retirement income for the majority of pensioners, any unnecessary losses will be sorely felt in retirement.

Furthermore, as the child benefit begins to be tapered away when someone earns £50,000 a year and is wiped out when they earn £60,000 a year, many who earn a wage in this earnings bracket understandably decide claiming the benefit isn’t worth the bother.

However, these people too could be missing out on National Insurance Credits to go towards their stage pension.

People are entitled to the full state pension when they have a record containing 35 years of National Insurance Contributions (NICs).

Parent

Millions of parents are missing out on state pension income (Image: Getty)

When people have under-35 years of NICs, they will receive a state pension income that corresponds to their record.

Indeed, it has recently been reported that over two million women receive less than £100 a week from their state pension.

Many of these women may have been entitled to more but miss out by making this simple mistake.

But by claiming the child benefit, even if someone chooses not to take the actual benefit, people will receive National Insurance Credits which make up the gap in the NIC record where someone is out of work due to caring responsibilities.

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Families should make sure that if a parent is not working because they are taking care of children that they are at least filling out the child benefit form so they don’t miss out on retirement income they are entitled to.

The benefit exists to ensure that raising a family is valued financially according to its social value and so that people will not lose out in retirement because they chose to focus on raising a family.

As for what the child benefit itself is worth for people earning below £50,000 a year, the claimant will receive £21.15 a week for the first child and £14 per child thereafter.

Parents cannot claim both claim child benefit for the same child.

The new full state pension is worth £179.60 a week.

This works out to roughly £9,340 a year.

Even this amount falls well below what is needed in retirement to be able to enjoy financial freedom and flexibility.

It has recently been revealed that the UK’s state pension is the meanest in the developed world and the third meanness in the world.

Infographic

What is the state pension? (Image: Express)

This means that countries like Romania and Poland have more generous state pensions than the UK.

The UK state pension replaces only around 22 percent of pre-retirement income, which will mean a drastic adjustment period to retirement if someone if relying solely or mostly on their state pension for their income.

In any event and even for people who can rely mostly on private pensions for retirement income, there is no reason to miss out on state pension income unnecessarily as millions currently do.

Harry Byrne

Harry Byrne

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