Claiming Child Benefit helps future pension entitlements

Thousands of mothers are potentially missing out on vital credits towards their future state pension because they are not claiming child benefit.

child benefits

Receiving child benefit for a child under 12 is one way for parents taking time out of work to raise their children to protect their national insurance record, but there is a twist as women who choose not to claim the benefit miss out on contributions towards their state pension whereas women who opt out of child benefit can continue to get national insurance credits!

This finding was highlighted in a recent report by pensions and insurance firm, Royal London.

Royal London said “a woman who started her family in 2013 and decided not to claim child benefit could have missed out on state pension credits for five years so far (2012/13 to 2016/17 inclusive). The total loss over those five years could be over £1,000 a year in retirement.

Over the course of a 20 year retirement, these women could be more than £20,000 worse off in total.

HMRC were alerted to this problem last year and have done nothing about it. These new figures are a damning indictment of a system that is no longer working for families. The government needs to take urgent action to ensure that mothers get the pension protection to which they are entitled.”

A recent report published by HMRC showed the number of children for whom child benefit is being paid is now at its lowest level since HMRC began producing these statistics in 2003.

The reason behind the reduction is due to a change to the rules on claiming child benefit, which came into force in January 2013.

The High Income Child Benefit Tax Change means that couples, where one partner earns more than £60,000 a year lose the value of the benefit by a tax charge.

Consequently many mothers have declined to claim child benefit at all.

If you are unsure about any aspects of taxation or National Insurance, or would like a review of your pension entitlements contact your local Burgis & Bullock office on 0845 177 5500 or use our on-line contact form.

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