'Stay at home' mums: don't lose your NI credits

Thanks to new rules on child benefits, some mothers could miss out on collecting their National Insurance credits. Here's how to make sure you don't.

I wrote a few days ago about the various different ways in which the taxpayer subsidises stay at home mothers mainly via National Insurance credits and state-funded nursery care for the over-threes. But as I wrote it, something occurred to me.

National Insurance credits for non-working mothers of under-12s are very valuable. A working parent on a salary of £25,000 pays well over £2,000 a year in National Insurance, and if you had to buy back the NI years you missed while caring for children, it would cost you not far off £700 a year (£13.50 a week). However, your credits are calculated based on your child benefit claims.

It is the fact that you are claiming child benefit that automatically puts your credits in the system. So what if, thanks to the new regulations regarding child benefit (whereby those in a household in which one party earns more than £60,000 don't get it), you aren't claiming child benefit anymore? Do you still get the credits?

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I called HMRC to clarify. The answer is that you do. But that it isn't always automatic. As far as I understand it from HMRC, if you have previously been receiving child benefit but have now said you won't take it, you are in the system anyway (thanks to your original claim form) and so will get your credits. The boring admin only comes in if you have had a child since the new rules came in, are not eligible and have decided not to claim at all.

In this case, you should go to the HMRC website and fill in a claim form the key bit being Section 4, Question 62 where you tick to decline benefit payments but to protect your state pension. It shouldn't take more than a few minutes but it will make sure that you continue to get your £700-a-year's worth of credits and that if you should go back to work in the future, you won't have to put in quite as many years as you might have to get the full, new flat-rate pension.

Merryn Somerset Webb

Merryn Somerset Webb started her career in Tokyo at public broadcaster NHK before becoming a Japanese equity broker at what was then Warburgs. She went on to work at SBC and UBS without moving from her desk in Kamiyacho (it was the age of mergers).

After five years in Japan she returned to work in the UK at Paribas. This soon became BNP Paribas. Again, no desk move was required. On leaving the City, Merryn helped The Week magazine with its City pages before becoming the launch editor of MoneyWeek in 2000 and taking on columns first in the Sunday Times and then in 2009 in the Financial Times

Twenty years on, MoneyWeek is the best-selling financial magazine in the UK. Merryn was its Editor in Chief until 2022. She is now a senior columnist at Bloomberg and host of the Merryn Talks Money podcast -  but still writes for Moneyweek monthly. 

Merryn is also is a non executive director of two investment trusts – BlackRock Throgmorton, and the Murray Income Investment Trust.