BRITS could lose billions of pounds in pension payments because of missed National Insurance credits.
The amount of cash you receive in retirement is based on the number of years of National Insurance Contributions (NICs) you make.
Gaps in contributions, such as when you’re not working and caring for children, can be filled by claiming credits instead.
But thousands of people are missing out National Insurance Credits, making them worse in retirement.
Data from pension consultants LCP reveals in 20 years of retirement they could be worth £5,335.
But in quantity pension scheme increases each year, it becomes more valuable over time, so next year the credit will be worth £5,501.
Those most likely to be affected are carers, couples and those with higher incomes and an estimated hundreds of thousands of people could be missing.
Carers who receive the Carer’s Allowance benefit will automatically receive the National Insurance Credit.
But for those who do not receive but still have care responsibilities, they need to claim a Care Credit to fill the National Insurance gap.
For the couple, Lowest earners may miss out on National Insurance credits if claiming child benefit in the name of the highest earner in their household.
Someone receiving child benefits for children under 12 is treated as if they had paid NI contributions for that week.
Meaning if the lower earner in the household is not a claimant, they are missing out on NI credits that count towards their state pension.
While, anyone earning more than £50,000 cannot get child benefit, But parents are still encouraged to sign up so they don’t miss out on credits.
Discount £800 a year
Grandparents have not yet reached retirement age and care for granddaughters may also be lacking.
A lady said she lost £800 a year in her state pension.
National Insurance Credits can be transferred from a parent to a caring grandparent, but only if the parent claims the child’s benefits first.
The grandmother of two people missed because her daughter did not claim.
Both parents and grandparents who discover they may have received the credits can only delay their claim for the National Insurance Credit by three months.
This means they could miss out and lose thousands of state pension payments later on.
The LCP explains that you need 35 years of National Insurance contributions, or credits if you don’t work, to secure a statewide pension.
Missing a year could cost you 1/35 of your full pension.
Previous LCP calculations showed that if 250,000 people were missing out on credits at any given time and typically missed out for four years, the total lost money would be up to 5 billion pounds, but it could be higher.
The good news is that if you haven’t reached retirement age, you can act now so you don’t miss out.
What is the National Insurance Credit?
The National Insurance Credit is a way of maintaining your National Insurance record when you are not making a National Insurance contribution.
They help accumulate qualifying years over time, which you can use to make yourself eligible for the basic state pension and other benefits.
You need 35 years NIC to get the maximum state pension under the new rules, which is a £179.60-a-week warranty and a minimum of 10 years to get anything.
Who is eligible for the National Insurance Credit?
You may be able to receive National Insurance credits if the following apply:
- You are on Jobseeker’s Allowance and do not have to go to school or work 16 hours or more a week or you are unemployed and looking for work, but are not receiving Jobseeker’s Allowance
- You are sick, disabled, or on salary
- You are on maternity, parenting or adoption pay
- You are a registered parent of a child for a child under 12, you want to transfer the credits from a spouse or you are a foster carer
- You are a carer on Carer’s Subsidy, on Income Support and provide regular and substantial care, or you are caring for one or more people who are sick or disabled for at least 20 hours a day week
- You are a family member over 16 but under State Pension age and you are caring for a child under 12
- Are you working on a tax credit or a universal credit?
- You are attending a training course or jury service
- Your partner is in the armed forces
- You were wrongly jailed
How do I check if I missed any National Insurance contributions?
You can check how many years of NI payments you have made and see any missing years on government website.
If you don’t have one, you’ll need to create an online government portal account.
How can I claim National Insurance credits for loopholes?
It explains the circumstances in which you need to request and when you will receive it automatically.
You will need to apply online or contact your local Job Center to receive the credits.
You can check how to register for each one on the same page.
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Source link Britons miss out on ‘billions’ of National Insurance credits for state pension