Parents and guardians are accidentally “reducing” their state pension by up to £30,000 through not claiming vital National Insurance credits via Child Benefit, experts have warned.
These credits are useful ways for people to boost their retirement income as they fill gaps in someone’s National Insurance record, with 35 years of contributions usually needed to get the full new state pension.
Expert are sounding the alarm that parents who care full time for their children could be missing out on vital credits which could boost their pension pot.
When someone adds an extra year to their National Insurance record, they could boost their retirement by up to £300.
Parents are missing out on vital National Insurance credits
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If someone does not work until their child is of primary school age, which is the equivalent of four years worth of National Insurance contributions, they could lose £1,200 annually from their state pension by not claiming credits.
Someone who claims their state pension until they are 90 could therefore lose out on £30,000 worth in state pension payments.
Rachael Griffin, a tax and financial planning expert at Quilter, warned Britons that Child Benefit is “not an automatic entitlement” which means it needs to be applied for.
She explained: “Parents who do not claim Child Benefit may not receive the NI credits they are entitled to, thereby reducing their state pension when they reach retirement age.
“This is especially problematic for stay-at-home parents or those with low incomes, who rely on these National Insurance credits to maintain their pension entitlement.
"For years the potential repercussions of not claiming child benefit have not been made clear to the public.
“Many parents have been left in the dark, unaware that their decision to forgo claiming child benefit could impact their future financial stability."
Earlier this week, HMRC outlined new details to ensure parents and carers will be able to claim National Insurance credits for any years they have not received Child Benefit for children under 12.
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Child Benefit can be claimed from the day after a child's birth has been registered GETTYLast year, the Government promised it would legislate to make sure those in this group would not miss out on vital credits which go towards their state pension entitlement.
Child Benefit claimants will be able to access this credit from April 2026, according to the latest update from HMRC.
Eligibility for this credit will be similar to the qualifying criteria for Child Benefit and the Government has confirmed transitional arrangements to make sure those impacted since 2013 will be able to claim.
Furthermore, HMRC has said applications will be open for six years following the relevant tax years with secondary legislation being pushed forward “as soon as possible”.