Parents could boost state pension entitlement by £3,600 a year – are you eligible?
Parents could fill National Insurance record gaps via Child Benefit
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Parents could increase their state pension entitlement by thousands of pounds via Child Benefit.
It’s possible to benefit from the retirement boost even if they lose the monthly payment through a tax known as the High Income Child Benefit Charge.
Child Benefit, which a parent or guardian may be able to claim if they’re responsible for bringing up a child under the age of 16 (or under 20 if they stay in approved education or training), offers an allowance to help with raising a child.
It also provides National Insurance credits which count towards the state pension, if the child is under 12.
Child Benefit provides National Insurance credits which count towards the state pension, if the child is under 12
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If a parent is not making National Insurance contributions through their work, such as because they are raising the family, then their state pension entitlement needn’t suffer.
This is because the National Insurance credits will fill gaps, which would otherwise appear in a person’s National Insurance record, if they were not working or not earning enough to pay National Insurance contributions.
A year’s worth of National Insurance credits amounts to one 35th of a full new state pension, working out at £5.82 per week or £302 a year, according to Rest Less.
It means people could potentially increase their state pension entitlement by £3,624 a year in retirement if they can benefit from the full 12 years of National Insurance credits available via Child Benefit.
If a parent doesn’t need the National Insurance credits, other members of the family may be able to get the support instead.
It’s possible for a husband, wife, or partner to apply to transfer the credits so they can benefit from the boost.
Other family members could also potentially fill gaps in their National Insurance record if they provide care for the child.
This can be done by applying for Specified Adult Childcare credits.
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How much is Child Benefit?
Child Benefit rates depend on who the payment is for.
The weekly rate is currently £24 for the eldest or only child.
For any additional children, the rate is £15.90 per child.
Child Benefit will increase by 6.7 per cent from April 8, 2024.
It means the weekly rate for an eldest or only child will rise to £25.60, and £16.95 per child for any additional children.