Did you know that claiming Child Benefit could mean you get more State Pension? Retirement might be the last thing on your mind when you’re looking after a new baby, but what you do now could have a big impact on your future finances.
Protecting your State Pension
No-one automatically gets the full amount of State Pension when they retire.
You’ll only get the full amount if you’ve paid - or been credited with – National Insurance contributions for 35 years. Usually, you’ll build up a year of National Insurance contributions by paying taxes on your wages, but when you claim Child Benefit, you’ll be credited with NICs until your youngest child is 12, even if you’re not earning.
The credits are automatically added to your National Insurance account when you claim Child Benefit – so you don’t need to do anything.
If you reach State Pension age on or after 6 April 2016, you’ll get the new State Pension.
The full amount of the new State Pension for 2023/24 will be £203.85 per week.
What is Child Benefit?
Child Benefit is a regular payment from the government to help with the cost of raising a child.
You can claim Child Benefit for each child you’re responsible for if they’re:
- under 16
- under 20 and still in approved full-time education or training.
In the 2023/24 tax year, you could get:
- £24.00 a week for your first child
- £15.90 a week for any more children.
Payments are tax-free as long as neither parent earns more than £50,000 a year.
If you earn more than this, you’ll have to pay back some of the money in the form of extra Income Tax. This is called the ‘High Income Child Benefit Charge’.
If either of you earns over £60,000, you can always opt not to receive the payments – and avoid the tax charge – but still get the entitlements.
How to claim Child Benefit
Download a claim form (CH2) from the GOV.UK website
Even if you don’t think you qualify because either you or your partner earns over the £50,000 tax-free limit – it’s still worth claiming. This is so you don’t miss out on National Insurance credits.
If you’re a foster carer
If you’re a registered foster carer – you’ll need to apply to HMRC for National Insurance credits.
Transferring National Insurance credits
If you’re working and getting Child Benefit – you might be building up more National Insurance credits than you need.
The good news is you can transfer them to your partner if they’re not working or are on a low income and not paying National Insurance contributions.
You can make transfer claims on an annual basis after the end of each tax year.
Grandparent credits
You can also transfer National Insurance credits to someone else in your family – for example;
- sibling
- grandparent, or
- other direct family member.
if they look after your child (under the age of 12) for at least 20 hours a week.
They don’t need to be registered childminders.
These are known as ‘grandparent credits’.
How to get a State Pension statement
It’s easy to check how many years of National Insurance contributions you have – and how much State Pension these might give you.
You can also work out how many more years – if any – you need to get the full State Pension.
