Thousands of dollars can be added to a parent’s state pension claim. Are you making a simple error?
According to HMRC estimates, more than 200,000 parents are at risk of missing out on vital contributions to their state pension.
This is because if a working parent claims child benefit, the non-working parent will not receive the National Insurance Credits to which they are entitled.
This may result in them not being eligible for the full state pension, resulting in a loss of future state pension income.
Because the state pension accounts for more than half of most retirees’ income, any unwarranted losses will be felt keenly in retirement.
Furthermore, because child benefit starts to be phased out when someone makes £50,000 a year and is completely phased out when they earn £60,000 a year, many people in this income bracket reasonably believe that collecting the benefit isn’t worth the effort.
These folks, too, may be missing out on National Insurance Credits that might help them pay for their stage pension.
When a person has 35 years of National Insurance Contributions on their record, they are entitled to the full state pension (NICs).
When persons have less than 35 years of NICs, they will be paid a state pension based on their record.
Indeed, nearly two million women earn less than £100 per week from their state pension, according to recent reports.
Many of these ladies may have been entitled to more, but they were denied because of this simple oversight.
However, claiming the child benefit will result in National Insurance Credits, which will cover the gap in the NIC record where someone is out of work owing to caring duties, even if they do not take the real benefit.
Families should make sure that if a parent is unable to work due to child care responsibilities, they fill out the child benefit form to ensure that they do not miss out on retirement income.
The benefit exists to ensure that raising a family is financially valued in accordance with its social value, and that people do not lose out financially in retirement as a result of their decision to focus on raising a family.
For those earning less than £50,000 a year, the child benefit is worth £21.15 a week for the first child and £14 per kid after that.
Child benefit cannot be claimed by both parents for the same child.
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