In its package of tax simplification measures announced yesterday, the government has recognised concerns that some eligible parents who have not claimed Child Benefit could miss out on their future entitlement to a full State Pension.
The government is to address this issue by enabling affected parents to receive a National Insurance credit retrospectively, with details to follow.
Steven Cameron, Pensions Director at Aegon said:“It’s great news that eligible parents who didn’t claim child benefit will be able to claim state pension credits retrospectively. If a parent is eligible for child benefit, but they or their partner has an income of over £50,000, special tax charges can cancel out the child benefit payments. This leads to some not bothering to claim, but there’s another key benefit in claiming which many people are not aware of.
“Registering for child benefit entitles a parent to National Insurance credits which count towards their future state pension. To qualify for the full state pension, you need 35 years of NI credits. Taking a break from employment, but not claiming child benefit, could leave a parent short of the 35 years and mean their state pension is reduced.
“In future, subject to final rules, those who finds themselves in this position will be able to put in a retrospective claim. As it’s more often women who take career gaps to care for children, this measure is a helpful step towards reducing the gender pensions gap.”
