A little-known National Insurance credit could top up the state pension of over 20,000 Britons – but around £480m is yet to be claimed.
Partners of armed forces personnel who spent time overseas may be entitled to National Insurance credits towards their state pension. Yet so far, over 80% of this group has failed to take advantage of this credit.
According to research by insurer Royal London, the average military partner may be missing out out on around £30,000 in state pension during the course of their retirement.
What are National Insurance credits?
National Insurance credits allow you to fill gaps on your National Insurance record when you’re not working and unable to make National Insurance contributions.
As of 2016, you need to accrue 35 years worth of National Insurance contributions to qualify for the full state pension and 10 years to qualify for any payment at all.
- Find out more: how does National Insurance affect my state pension.
National Insurance Credits for military partners
In 2016, the government introduced a new system of Class 3 National Insurance credits designed to help the partners of those who serve in the armed forces.
When a member of the military is posted overseas, their spouses are often unable to work in that country. The credit allows these spouses to fill gaps in their National Insurance record and protect their state pension entitlements.
You can claim a credit for every week you’re outside the UK with your military spouse. A full financial year of the credits (meaning 6th April to 5th April the following year) counts towards 1 of the 35 years to qualify for a full state pension.
But a Freedom of Information request from Royal London found that four in five eligible people are not receiving the credit – and only 4,000 of the 20,000 affected have applied so far.
- Find out more: how much state pension will I get?
Am I eligible?
You can qualify for the National Insurance credit for military partners if you:
- Are a woman born after 6th April 1953 or a man born after 6th April 1951
- Are a spouse, civil partner, widow or divorcee of a member of the the armed forces
- Have accompanied your partner on an assignment overseas at any time since 1975
You may not be eligible for the credit if your partner was not being paid or credited with National Insurance contributions during the course of their deployment.
To apply for the National Insurance credit, you will need to complete an online application form on the HM Revenue and Customs (HMRC) website.
Can I top up my National Insurance credits?
Class 3 Voluntary National Insurance contributions allow you to fill gaps in your National Insurance record and qualify for state pension.
If you are not working or claiming any other benefits, you may be eligible for making Class 3 voluntary contributions.
The current Class 3 rate for the 2017/18 tax year is £14.25 per week.
You can usually only pay gaps in your record from the past 6 years. But depending on your age, you may be able to back-pay further.
Be sure to check your national insurance record to make sure that you’re entitlement is what you expect it to be.