State Pension payments provide important support to individuals in later life, but to be entitled a person must build up a certain amount of National Insurance contributions throughout their lifetime. National Insurance credits are usually obtained through working life, but career breaks and other factors may contribute to a lack of a full record. Now, a new Freedom of Information (FOI) reply from HMRC to Lane, Clark, Peacock (LCP) partner, Sir Steve Webb, has revealed many could be unwittingly doing damage to their state pension prospects.
The issue centres around claims for Child benefit – a payment from HMRC which can help individuals responsible for raising a child in the UK.
The FOI reply shows there are currently 200,000 couples across the UK where the “wrong” partner is currently claiming Child Benefit.
In these instances, the higher earner of a couple is receiving the Child Benefit, which could significantly damage an individual’s state pension.
This is because lower earners, or indeed non-earners, are consequently losing out on important National Insurance credits…
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