Martin Lewis has issued a warning to parents as 200,000 are estimated to lose out on a boost to their state pension.
Speaking on The Martin Lewis Money Show Live, Mr Lewis gave a “crucial warning” for people who may have made the “admin error”.
The Money Saving Expert founder urged all households claiming Child Benefit to check to see if they are affected, warning it could be worth thousands of pounds over the course of retirement.
He told ITV viewers: “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.”
State pension entitlement is dependent on a person’s National Insurance record
State pension entitlement is dependent on a person’s National Insurance record, with people needing at least 10 qualifying years to get any state pension at all.
The rules can be quite complex, but people who didn’t make National Insurance contributions or get National Insurance credits before April 6, 2016, would need 35 qualifying years to get the full new state pension.
Those who have between 10 and 35 qualifying years would get a proportion of the new state pension.
Parents with young children could get a National Insurance credit for each year until the child turns 12 via Child Benefit.
Mr Lewis explained: “Those who are not working or earning less than £123 per week are due National Insurance credits for childcare.”
However, the money saving expert went on to explain that some couples made an error with claiming – meaning the person who needs the National Insurance credit misses out.
“For many people in that circumstance, it is their partner, who is working, who does the childcare claim – not them,” 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 credits. They therefore need to be the one who is claiming Child Benefit.”
The financial journalist said it was “absolutely crucial” to check who gets the Child Benefit, urging non-earners and lower income workers to consider making the Child Benefit claim if they can.
A viewer had written into the programme to share their success story, explaining their husband topped up his state pension for free by transferring eight years’ worth of National Insurance credits from Child Benefit.
Crunching the numbers, Mr Lewis said it could be worth £2,400 a year. If they were to live for 40 years beyond state pension age, it could mean £48,000 in extra state pension, the broadcaster said.
The money saving expert went on to explain that for couples affected by the High Income Child Benefit tax Charge (HICBC), it was still worth filling out the form – and waiving the payment – to get the National Insurance credits.
Addressing those who want to get the National Insurance credit but their partner earns a salary of £60,000 or more, he said: “I know this sounds bonkers, but claim it, and opt out of getting a payment.”
The Martin Lewis Money Show Live is available to watch on ITVX.