We've never claimed child benefit: Are we missing out on future state pension credits?

My husband and I had our first child in 2018 and then a second child last year.

When our first was born, we didn't claim child benefit – both of our salaries were over £80,000 so it seemed pointless.

Last year, I was still working up until our second child was born. I then left my job just before Christmas.

I have no plans to go back to work for the next few years, but am worried about gaps in my National Insurance record and it hitting my state pension when I reach retirement age.

My husband still earns an annual salary above the child benefit threshold – but do we now need to act?

Angharad Carrick of This Is Money says: Starting a family is an exciting milestone for many couples, but it can come with its challenges.

Beyond the sleepless nights, nappy changes and eventual toddler tantrums, it also comes with financial implications.

Nursery costs have ballooned across the board, and fiscal drag means more people are being dragged into a higher tax rate and missing out on tax-free childcare.

You rightly mention another lesser-known issue associated with starting a family: the impact on National Insurance (NI) records and your state pension.

When you start work, you and your employer pay NI contributions, which qualify you for certain benefits and the state pension. To receive the full new state pension, you'll need 35 qualifying years of NI contributions.

This changes if you fall pregnant and are entitled to statutory maternity pay for 39 weeks.

For the first six weeks, you'll receive 90 per cent of your average weekly earnings, after which you'll get the lower of £187.18 a week or your average wage. Some employers are more generous.

Generally, you and your employer will continue to make NI contributions based on your actual pay, and any pay increases during paternity leave.

If you're not entitled to Statutory Maternity Pay, you may be eligible for Maternity Allowance for up to 39 weeks, whether employed or self-employed. However, after 26 weeks, your contributions will only be payable if stated in your scheme rules or employment contract.

If you return to work, you may be able to pay extra contributions to make up for any period of unpaid leave, and your employer must contribute.

If you go back part-time on a lower salary, your pension will build at a slower rate so you might consider paying extra contributions.

In your case, you say you've decided not to return to work for a while, which means you won't pay NI contributions, but your pension will remain invested.

You might be able to make extra contributions, but this will be subject to the annual allowance.

It gets a bit more complicated once your child is born and you start to claim child benefit.

All families are entitled to claim it, and it is currently £26.05 a week for the eldest and £17.25 a week for each additional child.

When you have a child under 12 and claim child benefit, you're automatically credit with NI contributions if you're listed as the claimant. However, only person can be named as a claimant and if you didn't claim when your first child was born in 2018, you could have missed out on credits.

In your case, it seems you continued to work so you'll have accrued them anyway.

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Under rules introduced in 2013, child benefit starts to be taken away once you become a 'high earner'. Previously, this removed child benefit if one parent earned between £50,000 and £60,000, via the high-income child benefit charge.

Once earnings reached more than £60,000, child benefit was removed entirely. In your and your husband's case, you were earning well over this amount, so there was no need to claim it because you were ineligible anyway.

However, last year these thresholds changed, and now a parent can earn £60,000 before the child benefit starts to be removed, until £80,000 when it is gone entirely. This is what's called the high income child benefit charge (HICBC).

While your husband's income places him above the threshold for receiving the payments, it does not remove your eligibility to claim or accrue NI credits.

We asked advisers for their thoughts on what you can do to help build up your NI credits.

Holly Tomlinson, financial planner at Quilter says: It's very sensible to be thinking about your National Insurance (NI) record now, as gaps can indeed affect your future entitlement to the state pension.

If you've been in consistent full-time work until recently, you may already have built up a decent record, but it's wise to make sure your time out of paid employment still counts.

To avoid unwanted admin or charges, one option is to opt out of the payments but still register for child benefit. This ensures you receive the NI credits while sidestepping the tax charge.

If you haven't already done so, you should fill out the child benefit form and tick the box to stop the payments. You'll then receive the credits automatically from the point you registered.

It's also worth thinking beyond just NI credits. Now that you're no longer earning, you won't be able to contribute to a workplace pension, and your long-term retirement savings could fall behind.

Your husband can help fill that gap by making spousal contributions to a personal pension in your name.

You can contribute up to £2,880 a year net (£3,600 gross with basic-rate tax relief), even if you have no income. This may seem modest, but over a few years it can build up and benefit from compound growth and might form part of your joint retirement planning strategy.

So yes, you do need to act both to protect your NI record and to ensure your private pension savings don't fall by the wayside while you focus on your children.

A little planning now can make a big difference down the line.

Freddie Barton, Independent financial adviser at Flying Colours says: Although it often seems counterintuitive to claim child benefit when one partner earns above the threshold and the HICBC applies, doing so means NI credits are awarded to the person who makes the claim - and they count towards the qualifying years needed for a full state pension.

And because you've now stopped working and are no longer paying National Insurance through employment, these credits could be crucial to avoid gaps in your NI record.

If I were in your position, I would submit a claim for both children as soon as possible but choose to opt out of payments.

It's also a good idea to check your current NI record to see where you stand – you can do this through HMRC's online services, or by requesting a state pension forecast.

By acting now, you'll be protecting your future state pension entitlement. It's a simple step that can make a real difference later on.