At present many people miss out on the full state pension as they have missed some contributions or even credit for contributions. To maximise state pensions you need 35 years of contributions and some of those can be earned by being a parent or a carer and receiving the appropriate credit. It is worth checking that your record is correct and this can be done on your personal tax account at HMRC which can be found at the following link.
If you miss a year’s contributions you are potentially losing £250 per year of pension in retirement so it is worth checking now as errors can be corrected.
You should be credited with a full year’s contributions if you earn over £120pw for the current year.
If a parent is not earning enough to be credited with a year’s contributions (£120pw minimum this year) you can get credited with a full year’s contributions if you claim child benefit and your child is under 12.
1. Make sure that the parent that needs the credits is claiming or transfer the credit via HMRC form CF411a https://www.gov.uk/government/publications/national-insurance-credits-for-parents-and-carers-cf411a
2. Make sure that child benefit is claimed even if one partner earns over the limit for the parents to receive it. It can be claimed but then you can opt not to receive it. This will ensure that the credits are applied to the claimant’s account. This is important if one partner is a high earner but the other has no earnings or earnings below the minimum level. The entitlement to be paid child benefit decreases on earnings between £50,000 and £60,000, please note that claims can be back dated 13 weeks.
3. If you’re a parent caring for a child under 16 for periods before 6 April 2010, go to www.gov.uk/home-responsibilities-protection-hrp/overview
If both parents are working and a grandparent or other relative is looking after children below 12 years of age the year’s credit can be transferred to the grandparent or relative if they have less than the full level of contributions and are below state pension age. Use the same form as above. You can apply for Specified Adult Childcare credits instead, for more information, go to www.gov.uk/boost-state-pension/overview .
If you are a parent you may also want to look at ‘Transferring entitlement to credits for parents and carers’ . This potentially can be backdated to 2011.
You do not need to use the application form if one of the following applies:
1. you’re looking after one or more people for at least 20 hours a week, and the person or persons you’re looking after has Disability Living Allowance, Attendance Allowance or Constant Attendance Allowance, you can apply for a Carers Credit instead, for more information go to www.gov.uk/carers-credit
2. you get Income Support when you’re looking after one or more people and you do not have to be available for work. You will already be automatically getting credits. If you think the credits are missing from your National Insurance account, go to www.gov.uk/boost-state-pension/eligibility
3. you get Carer’s Allowance – you will already be automatically getting credits, for more information, go to www.gov.uk/carers-allowance
If you are self-employed but do not have enough profits to pay national insurance you can pay that by agreeing on each year’s tax return.
Other people can also make up any deficit in contributions by making voluntary contributions.
Please read the information at this link. https://www.gov.uk/voluntary-national-insurance-contributions