The first few of these relate to missing out on National Insurance (NI) credits. You need 35 years of these to qualify for the full state pension. You normally gain these by working, but in some cases you can qualify in other ways – and this is where people are missing out. This isn’t trivial. If you can add just £10 a week to your pension, and you get it for 25 years, that’s an extra £13,000.
1: PARENTS: Got young children? Don’t risk losing your state pension.
Since January 2013, child benefit has been means tested. If one parent earns more than £50,000 the amount you get reduces – reach £60,000 earnings and you get nothing (though, bizarrely, two parents earning £49,999 each are OK).
Many parents of children born since then who don’t qualify understandably haven’t bothered to claim the child benefit. This is a mistake. Claiming also triggers NI credits, crucial if you don’t work or earn under £5,824. If you don’t get enough credits, you won’t qualify for the full state pension.
If so, either just claim the benefit and accept the higher earning partner will pay tax on it or, if one earns over £60,000, claim child benefit at a ‘zero rate’, which still triggers the credits. To do this on the child benefit application form at www.gov.uk/child-benefit/how-to-claim, tick Section 4 for ‘Higher Income Earners’.
2. GRANDPARENTS: Looking after the children may mean NI credits .
If you’re a grandparent looking after your grandchildren under the age of 12, the working parents (who are therefore getting their own NI credits) may be able to transfer their credit to you to help with your qualifying years for the state pension. You need to fill in a CA9176 form www.gov.uk/government/publications/national-insurance-application-for-specified-adult-childcare-credits-ca9176 and send it off to HMRC. Both you and the parent transferring the credit need to sign the form.
3. CARERS: You’re due credit.
If you’re one of the UK’s unsung army of carers, you may well be sacrificing your own earnings potential to help someone else. There may be some help available though.
Carer’s credit: For those caring between 20 and 35 hours a week and who aren’t paying their full NI. This credit effectively tops up your record so you’ll have a larger state pension when you retire. It’s thought up to 200,000 carers are missing out on this.
Carer’s allowance: For full-time carers (35-plus hours a week) – if the person you’re looking after gets certain benefits, you may be due up to £62.10 weekly.
For full help on this go to the government’s carer’s credit webpage at www.gov.uk/carers-credit/overview, or call them on 0345 608 4321.
4. PENSIONERS: Are you one of 1.3 million missing out on pension credit?
It’s thought that one in three lower income pensioners who are entitled to a top-up of their state retirement entitlement called ‘pension credit’ are not claiming it. If you’re aged 63 or more, and don’t receive the full state pension and have income of less than £155 a week (£237 if you’re a couple), you may be entitled to this extra payment. Averaging more than £50 a week, it’s not to be sniffed at.
Even those with some savings may be entitled to up to £14 a week of pension credit. Who is eligible is complicated, but if you think you may be due, then it’s worth calling the Pension Service on 0800 99 1234, or filling in the application form at www.gov.uk.
While most older people are more than capable of doing this themselves, some do find this complex. If you know someone you think may be eligible, do spread the word and encourage them. After all, to have some of our oldest and poorest in society missing out is a tragedy.
5. SEVERE MENTAL INCAPACITY: Council tax rebates may be possible.
If there’s only one person living in a house then council tax is reduced by 25 per cent. Yet certain groups are ‘disregarded’ for council tax purposes. Students are one, but it’s little known that those with medically certified ‘severe mental impairments’, such as Alzheimer’s or dementia are also exempt.
So, if two people live in a house and one has a severe mental impairment you should get 25 per cent off. It’s thought that hundreds of thousands of people miss out.
To qualify, the person needs be eligible for one of at least ten benefits, including severe disablement allowance, disabled persons tax credit, incapacity benefits and employment and support allowance.
To claim, you can find your council contact details at www.gov.uk/apply-council-tax-reduction. If it says it hasn’t heard of this (sadly too common), persevere. This can also be backdated, as far as it was relevant, to 1993. To make a retrospective claim, you’ll need to write to your council explaining the circumstances. You have to do this separately, even if you’re claiming for a reduction going forward as well, though you can attach your letter to the claim form.
I’ve heard huge successes on this. Carolyn emailed me to say: “Thanks to your info, my stepfather received £1,100 for overpaid council tax as he had not been informed he was due 25 per cent off due to mum’s dementia”.
l Martin Lewis is the founder and chair of MoneySaving Expert.com. To join the 12 million people who get his free Money Tips weekly email, go to www.moneysavingexpert.com/latesttip