State Pension UK: Britons can boost their pension sum using Child Benefit

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State Pension payments are issued in varying amounts dependent on the National Insurance contributions a person has made throughout their lifetime. To unlock the full state pension sum, it is usually the case that a total of 35 years of contributions are necessary for a person to claim. However, an issue which slips under the radar for many people is how intrinsically the state pension is tied to Child Benefit.

This is because pension payments can be affected later down the line by the way in which parents and guardians choose to claim.

The issue has been highlighted by Kay Ingram, Director of Public Policy at national financial planning group, LEBC.

Ms Ingram has drawn attention to a number of ways Britons may be able to increase their state pension sum.

Simply taking the time out to address one’s state pension entitlement could make a valuable difference to the amount a person receives.

As such, people of all ages should pay attention to this sum as acting sooner rather than later could be a significant help. 

Ms Ingram urged those who are eligible to claim for Child Benefit to potentially benefit later in life.

She said: “Parents not paying National Insurance contributions through employment or self-employment may claim credits, which are automatically provided when claiming Child Benefit.

“To ensure the National Insurance credit is not wasted, it is essential that the adult who is not paying NI through employment or self-employment claims the Child Benefit.

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“Credits will continue until the youngest child is 12.”

According to government rules, only one person is allowed to receive Child Benefit for a child.

Therefore, as Ms Ingram importantly highlights, who claims this benefit is vital as it is likely to affect a pension sum later down the line.

If one parent has taken time off work, or has quit work altogether to look after a child, it may make sense for them to claim.

This is because the Child Benefit payment will boost the National Insurance they have lost out on due to not working.

However, as Child Benefit is taxable for those earning over £50,000, many may have opted out of receiving the sum from the government.

But, as Ms Ingram also highlights, these individuals should also take action to protect their state pension. 

She added: “Parents who have waived the benefit due to the High Income Child Benefit Charge can also claim the NI credit by applying for Child Benefit but then waiving payment.”

Waiving the payment means parents will not be subject to tax implications, but can receive the all-important National Insurance credit for their state pension. 

At present, the full new state pension stands at £175.20 per week for those who are eligible.

Pensioners can expect to be paid their sum once every four weeks into the bank or building society account of their choice. 

Britons can also apply for a state pension forecast via the government website, which will inform them how much they are currently set to receive and when. 

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