The UK government has announced plans to address the issue of parents who have not claimed Child Benefit potentially missing out on building their state pension. Child Benefit claimants are eligible to receive a National Insurance credit, which can help them build up their pension entitlements even if they are out of work or not earning enough to pay National Insurance.
However, some parents who are entitled to claim Child Benefit do not do so, potentially leaving them at a disadvantage when they start claiming their State Pension. This is often due to concerns over the High Income Child Benefit Charge, which can apply if one parent earns above a certain threshold.
To rectify this issue, the government plans to legislate to allow eligible individuals to retrospectively claim National Insurance credit. This means that parents who did not claim Child Benefit in the past but are now eligible to do so can still build up their state pension entitlements. The government has not yet provided details on how this process will work, but further information is expected to be released in due course.
The announcement was made as part of the April 2023 Tax Administration and Maintenance Day, during which the government publishes various technical documents and consultations. The proposals aim to address an anomaly in the system whereby parents who do not register for Child Benefit do not accrue any National Insurance credits towards their state pension entitlements.
In summary, the UK government is taking steps to ensure that parents who have not claimed Child Benefit are not disadvantaged when it comes to building their state pension entitlements. The proposed changes will allow eligible individuals to retrospectively claim National Insurance credits and further details will be released in due course.
We will keep you informed as the government provides further details, but please do not hesitate to contact us at any time.