Child Benefit is an allowance paid to you by the government for children under the age of 16, or under the age of 20 if they are in approved education/training.
By claiming, you will receive:
- £21.80 per week for the eldest or only child
- £14.45 per week for each of the younger children
- A National Insurance number for your child (rather than them receiving this at age 16)
- National Insurance credits which count towards your State Pension
Child Benefit & your State Pension
You earn valuable National Insurance credits when you claim Child Benefit and your child is under 12.
These National Insurance credits count towards your State Pension, especially important for those who have gaps in their employment history or plan to take time out from work.
Many people think that everyone is entitled to a full State Pension when they retire, this is not the case.
The new State Pension requires a minimum 10 years’ full National Insurance (NI) contributions for any payment at all.
You will need 35 years full NI contributions for a full State pension which is currently £185.15 per week and paid out from age 66 though this is planned to rise to age 68 in future.
Who should claim?
Only one person can get Child Benefit for a child, so you need to decide whether it’s better for you or the other parent to claim.
The person who claims will get National Insurance credits towards their state pension if they are not working or earn less than £242 per week.
In certain instances, you may be able to transfer the NI credits to another family member should you and your partner already have a full NI record or anticipate you will do by retirement.
You can find details here: Specified Adult Childcare credits: fact sheet - GOV.UK (www.gov.uk)
If you or your partner earn over £50,000
If one of you has an adjusted net income over £50,000, you may have to pay the High-Income Child Benefit Charge on some of this, the best way to see if this applies to you is to use the Child Benefit tax calculator on the government website:
Child Benefit tax calculator - GOV.UK (www.gov.uk)
Where one partner earns over £60,000 the tax charge is the same as what you would receive in Child Benefit financially, therefore you can choose to opt out of getting payments.
Many write off claiming child benefit completely at this stage, thinking that there is no benefit to be had, this could be a big MISTAKE!
Who can apply for Child Benefit?
You normally qualify if you’re responsible for a child that lives with you and you pay towards looking after them.
For those who are claiming other benefits, this may impact or be included with the benefit cap and you will need to verify this.
There are other rules and eligibility criteria, information can be found on the government website and the government helpline:
Child Benefit: Eligibility - GOV.UK (www.gov.uk)
Child Benefit helpline
Telephone: 0300 200 3100
Welsh language: 0300 200 1900
Textphone: 0300 200 3103
Outside UK: +44 161 210 3086
Monday to Friday, 8am to 6pm
This article does not constitute financial advice and benefits are dependent upon individual circumstances. While correct at the time, information may be out of date or subject to change.
(February 2023)
Claire is an Independent Financial Adviser for Smythe House Ltd, a boutique Wealth Management firm based in Mayfair and is a specialist in holistic financial planning for families and those with small businesses. After realising how little she knew about personal finances, tax and investments in general, she was inspired to change careers and train as a financial planner to be in a position to help others in a similar situation. Among other things, Claire can advise on Mortgages, Investments, Pensions, Personal & Family Protection including Life Insurance, Critical Illness Cover and Private Medical, as well as more wider tax planning for inheritance tax and personal tax allowances.
Claire is a certified European Financial Adviser with the EFPA, a member of the Personal Finance Society and of the Society of Mortgage Professionals, she holds a Diploma in Regulated Financial Planning
For any enquiries, you may contact her on clairecrook@smythehouse.co.uk
Disclaimer
Please always check with your healthcare professional before making any changes to your lifestyle so as to ensure the safety of you and your baby.
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