Many stay-at-home parents could be missing out on their state pension entitlement by not registering for Child Benefit.
Since January 2013, couples where one partner has income of more than £50,000 have had to begin repaying Child Benefit through the High Income Child Benefit Charge. Once one partner’s income reaches £60,000 all of the Child Benefit must be repaid to HMRC which often requires the higher earning partner to complete a self assessment Tax Return.
In order to save the bother and additional admin of receiving and then repaying the Child Benefit many new parents are opting to simply not register for Child Benefit in the first place. After all, what difference does it make?
Well, if you are the parent of a child under 12 and either do not work or have a low income, it can make a significant difference in later life when the time comes to collect your state pension.
If you are not working then you are not collecting years towards qualifying for the state pension. Under current rules you need 35 years of contributions to qualify for the full pension. If you take a career break to care for your children, or take a reduced-hours job with a reduced-salary then this can make it difficult to qualify.
Simply registering for Child Benefit ensures that whilst your child is under 12 you will qualify for Class 3 National Insurance Credits which count towards your state pension. This is the case whether you choose to receive the benefit or not, and also if it is received and then repaid.
Information about eligibility for Child Benefit, how to register and how to opt out can be found on the HMRC website at www.gov.uk/child-benefit.
The Treasury is currently in correspondence with HMRC about this and is trying to determine the number of families who might be affected.
