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Martin Lewis issued an urgent warning during tonight’s Money Show as hundreds of thousands of Britons could be missing out on substantial sums of their state pension.
The Money Saving Expert founder told viewers to check which partner is claiming child benefit to ensure they receive the full state pension amount.
Mr Lewis said: “There are 200,000 of you out there who are missing out on thousands, or potentially tens of thousands of pounds of state pension because the wrong partner in your relationship is getting the National Insurance credits.”
The amount a person gets in their state pension is based on the number of qualifying National Insurance (NI) years they have. People acquire the qualifying years by working and they typically need around 35 years to receive the full amount.
However, people who aren’t working due to circumstances such as raising children, or having a disability, can gain credits instead to entitle them to the full state pension payment.
Mr Lewis said: “Those who are not working or earning under £123 a week are due National insurance credits for child care.”
But for many people in that circumstance, Mr Lewis said it’s typical their partner, who is working, completes the childcare claim instead of the person who isn’t working.
Mr Lewis said: “But the working partner already gets National insurance credits because they’re working. So you want the non-working partner to be getting the credit, and they therefore need to be the one who is claiming child benefit.”
Mr Lewis added: “The form on Gov.UK is F411A. It’s absolutely crucial to check who gets the child benefit. If you’re not working, it should be in your name if you can. There may be some domestic abuse issues where it isn’t appropriate – but in most cases.”
One viewer who had followed the tip in the past wrote into the show to share the success. After thanking Mr Lewis for helping their husband top up his state pension “for free”, the viewer said: “We applied to transfer eight years’ worth that I’d received by claiming child benefit whilst working. Our claim was successful. We thought about paying to top up his contributions but couldn’t afford it. It will make a real difference to us.”
Doing some quick maths on how much the viewer would have boosted their pension by claiming eight years worth of credits, Mr Lewis said: “Here’s the maths. Eight years – each one of those boosts your pension by £300 a year. So that’s a boost on the final state pension of £2,400 a year.
“If you live 20 years, that’s £48,000 extra state pension. This is not a trivial thing that I’m talking about. 48 grand.”
People who typically wouldn’t qualify for child benefit because their partner earns £60,000 or more, can claim for it anyway but refuse the money, to ensure the non-working partner still gets National Insurance Credits and a full state pension.
Mr Lewis said: “Many don’t claim child benefit if one person earns £60,000 or more. Because one partner earns over 60 grand you’re not entitled to child benefit – or you can get child benefit, but then the same amount is taken off you in tax.
“Yet if the other partner isn’t working, they should be claiming child benefit to get the National Insurance credit. So what the other person should do is claim it. I know this sounds bonkers, claim it but opt out of getting a payment. That would ensure you get the National Insurance credit.”
Mr Lewis added: “Two important Gov.uk checks you should all make. Check your National insurance record to see if you have any missing years, and then check your state pension forecast to see if you’re on track to get the full state pension.
“If you’re not, and if you’re not entitled to free years, you are able to buy back past years, and, you know, for a payment of up to £800, it could be worth £5,000 over your state pension life.”
The Martin Lewis Money Show airs on ITV every Tuesday at 8pm.
