Hundreds of thousands of Brits could be missing out on billions of pounds in National Insurance credits because they’re not sure what they’re entitled to, new research has revealed.
Pension consultants LCP have said that some people could lose £5,000 in pension money over a 20 year retirement if they don’t claim their credits.
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The groups that tend to do this the most are carers not on carers allowance, couples where the higher earner is also claiming child benefits and couples who started a family since 2013 when the “high income child benefit charge” was introduced.
LCP have created a guide to help people understand what they can receive. It outlines credits that are available and how people end up missing out.
In the guide, it says how people who have taken a break from work because they have a child or are caring for someone aren’t claiming the credits they are entitled to, which ends up affecting them when they reach retirement age.
This is because you need 35 years of National Insurance contributions, or credits if you’re not working, to secure a full state pension. Missing out one year can cost you 1/35 of your full pension.
For example, LCP says if 250,000 people are missing out on credits at any point in time or miss out for four years (for example, a mother who only goes back to work when their child starts primary school), they are therefore losing £20,000 in state pension payments in retirement.
This means the gross amount lost by these people would be as much as £5 billion.
The good news is that if you’ve not hit retirement age yet, you can still claim for any credits you’ve missed.
What are National Insurance credits?
National Insurance credits are a way of maintaining your National Insurance record when you are not making National Insurance contributions.
They help to build up qualifying years over time, which you can use to make you eligible for basic state pension and other benefits.
Who is eligible for National Insurance Credits?
Only certain Brits can claim National Insurance Credits. They are as follows:
- You’re on Jobseeker’s Allowance and not in education or working 16 hours or more a week or you’re unemployed and looking for work, but not on Jobseeker’s Allowance
- You’re ill, disabled or on sick pay
- You’re on maternity, paternity or adoption pay
- You’re a parent who has registered for child benefit for a kid under 12, you want to transfer credits from a spouse or you’re a foster carer
- You’re a carer on carer’s allowance, on Income Support and providing regular and substantial care or you’re caring for one or more sick or disabled person for at least 20 hours a week
- You’re a family member over 16 but under State Pension age and you’re caring for a child under 12
- You’re on working tax credit or universal credit
- You’re on a training course or jury service
- Your partner is in the armed forces
- You’ve been wrongly imprisoned
How can I check if I’ve missed any?
You can create a free government gateway account online here. Some credits you’ll be receiving automatically if you’re on certain benefits, but if you’re unsure you should create an account and track your payments.
How can I claim them if I have missed any?
Under each section of who is eligible on the government’s website regarding money and tax, it has been outlined whether or not each person who is eligible needs to claim or receives National Insurance Credits automatically here.
You’ll either need to apply online or have to contact your local Job Centre to receive the credits.
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If you want to find out more about National Insurance, we’ve created a guide here.
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