Ask the Experts: Will I receive national insurance credits and will they boost my pension?

Q

“My question is about national insurance credits counting towards state pension. I am male and due to receive my state pension this month. I have 46 qualifying years up to the 2015/16 tax year, but for most of that time I was contracted out as I was a civil servant. As a result, my pension is forecast to be £121.89 a week.

I retired from the civil service on my 60th birthday in May 2012. I have cared for my grandchildren for the past four years and to increase my pension obtained a form (CA 9176) to apply for specified adult childcare credits for the 2016/17 year. I called HMRC to get some advice about filling out the form and was told I no longer needed to complete it as I would receive an automatic credit for the past three years.

Is that right? Will I automatically receive national insurance credits for the past tax years? Also, will that credit increase my state pension?

”

From: JP/Thaxted

A

Yes, the information you’ve been given is correct. There is a little known automatic national insurance credit scheme in place, which applies only to men who were born before 6 October 1953.

It is a benefit that is being phased out, but it means you will get automatic credits for certain tax years when you were close to retirement age and were either not working or not earning enough to pay national insurance contributions.

This is subject to the caveats that you were not out of the UK for more than six months in any of those tax years and that you were not self-employed and paying Class 2 national insurance contributions.

• What will you do with your pension?

You can find more information on the number of years these credits can be claimed for at Gov.uk/automatic-pensioncredits- for-men.

As you were born in May 1952, you are able to get credits for the tax years where you were aged 62, 63 and 64, and these credits will help towards your state pension.

As you have qualified for automatic credits for the past three years, then you will not need to worry about claiming the specified childcare credit for those years so this has saved you some paperwork.

• Your guide to the new state pension

However, you mention you have been looking after your grandchildren for four years. You can backdate your claim for specified adult childcare credit as far back as 2011. You qualify for this benefit if you are a grandparent or other family member looking after a child under the age of 12 and the child’s parent/main carer is entitled to child benefit and has a qualifying year for national insurance.

The child’s parent will need to countersign your application to confirm you looked after their child for the period stated and that you can have the Class 3 NI credit for the period stated. You can apply at Gov.uk/government/ publications/national-insuranceapplication- for-specified-adultchildcare- credits-ca9176.

Moneywise adds:

The state pension has gone through a lot of changes in recent years. It has changed from a multi-tiered system to one flat rate, supposedly, although in practice many people don’t qualify for the full flat rate. The age you receive your state pension is also changing – it is gradually rising to 67 by 2028.

• Retirees can look forward to £26k tax-free cash

 This means it is very difficult to guess what you will receive and when you can start claiming your state pension. However, you can apply for a state pension forecast at Gov.uk/check-state-pension.

Alongside your state pension forecast, you will also receive advice on whether you may be able to increase your state pension if there are gaps in your national insurance record.

Helen Morrissey is the personal finance specialist at Royal London