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15th March 2017
Protecting your State Pension via Child Benefit and National Insurance Credits

Despite what you might think, no one automatically gets the full amount of State Pension when they retire. The full State Pension is currently £8,093.30 per annum and you will only get the full amount if you have paid, or been credited with, National Insurance Contributions (NIC) for 35 years. If you have less than 10 years of NIC records you will not qualify for the State Pension at all.

The key word here is ‘credited’.

Even if you’re not working while looking after your children, you will get National Insurance credits when you claim Child Benefit until your youngest child is 12. Foster carers get them too.

The credits are automatically added to your National Insurance account when you claim Child Benefit, so you do not need to do anything.

However, what happens if somebody does not claim Child Benefit, or if one of the parents 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’. Therefore, to avoid the tax charge, some people with income above £50,000 decided not to claim Child Benefit.

But, by doing so their partners may lose the chance to receive the NIC credits if they are not working while looking after their children.

The good news is that you can still register for Child Benefit to protect your entitlement to the State Pension and at the same time you can opt out from the payments of Child Benefit to avoid the tax charge.

It is recommended that the Child Benefit should be registered in the name of the parent who is off work to bring children up to 12 years of age regardless of their partners income and you can re-apply if you have already stopped receiving the payments.