Victory for mums after five-year This is Money child benefit campaign

• Innocent Child Benefit Mistakes Cost Many Mothers Older Age
• Government shrugged off family pleas for years, but turned around
• This is money, and former minister Steve Webb has waged a lengthy campaign for his parents

After years of avoiding the This is Money campaign on behalf of the family, the mother is to be handed valuable public pension credit in a major government cut.

An innocent child benefit blunder means many parents ended up losing tens of thousands of pounds in old age, but until now their pleas have gone unheeded.

The Treasury Department announced today that it is planning to address the fact that parents who do not claim benefits for their children may miss out on public pension contributions.

Treasury Secretary Victoria Atkins said:

“The government does not want parents who do not claim child benefits to be penalized when they start claiming public pensions, and has announced solutions for affected parents. increase.

“Parents do not need to take immediate action. The government plans to enact legislation to allow eligible individuals to retroactively claim National Insurance credits, and next steps to be taken will be published in due course. be done.

Former Pensions Minister Steve Webb, who has lobbied with This is Money since it launched its campaign in 2018, said today’s announcement was very welcome.

“While it is understandable that some parents choose not to claim child benefit payments, it is important that parents do not suffer damage to public pensions as a result.

“The problem in the past was that there was a three-month deadline backdating the child’s benefit claim date, which meant the damage would be permanent.”

“I am pleased that the government has finally listened to the campaigners and has come up with a plan to make changes that will raise the public pensions of thousands of parents. A lot of mothers.”

LCP partner Webb launched a high-profile petition in 2018 demanding a full rollover of the mother’s pension credit.

However, the government rejected his call, arguing that it was too difficult to verify child benefit claims that were over three months old.

Meanwhile, the government’s in-house tax expert, the Office of Tax Facilitation, said in a report published four years ago that parents losing public pensions because of errors in child benefits that they can’t later correct are ” unreasonable,” he said.

However, no action was taken accordingly.

Emma Maslin was one of the first mothers to contact us about this issue. We talked about how she lost her four years of public pension credit. Had she lived her twenty years, tens of thousands of pounds of money could have remained in her hands. After retirement.

Financial coach Maslin writing a personal finance blog whisper of moneytold us today: “This is a huge win for those of us who have violated the nonsensical system of having to submit a claim even if you don’t want to receive child benefits.

“This problem hits women harder than men because women typically dedicate their time to looking after young children and can claim national insurance credits.

“Women are impacted by the gender pay gap, often returning to part-time jobs after giving birth, and maternity leave delaying their career progression. All of which impacts our pension pot. give.

“Maximizing public pension records is critical to safeguarding future pensions, and this setback by the government means many women will get the boost they really need for their future selves. increase.”

This is a Money campaign for mothers for 5 years

Before today’s sudden U-turn by the government, thousands of parents faced poorer retirements for not filling out forms within three months of having a baby.

Many parents don’t realize that a mistake made in the hectic weeks of their child’s life can cost them tens of thousands of pounds in old age.

When the mothers contacted us, we launched a campaign highlighting the scandal and urging the government to fully backtrack their public pension credits.

Our pensions columnist Steve Webb led the campaign with us, and many others including former pensions minister Ross Altman and former MP and chairman of the Finance Committee Nicky Morgan. We have written about this issue on our page.

Her mother, Emma Maslin, pictured above with Webb, also worked with us to write about her experience here.

The problem arose as the number of families claiming child benefits plummeted after the controversial 2013 overhaul.

This has also punctured many women’s future public pensions because of the link between two important but little known payments.

Until today’s government announcement, parents faced a difficult retirement as they were unable to claim child benefits because they were not entitled to child benefits.

When the parents belatedly realized this would hit public pensions, they were able to backtrack credit for three months, but permanently lost entitlement to the rest.

Parents can submit a claim for benefits for their child, but can opt out of receiving payments by checking the box to receive only state pension credits.

However, many families believe that they should not claim the money because they are not entitled to it.

Child benefits are reduced for those earning over £50,000 and completely eliminated for those earning over £60,000. Officially known as the High Income Child Benefit or HICBC.

The rule was criticized from the beginning as it would penalize families with one parent earning just over £50,000, but families with both parents earning just under that amount would still be paid full child benefit. .

The threshold has not changed since its introduction. This means more families lose their entitlement to child benefits every year, more new parents don’t sign up and thousands of pounds of public money they would otherwise qualify for when they retire. means you are at risk of missing out on your pension.

The government has dismissed our calls for years to reconsider backdating credit. Another public pension scandal involving young women.

this came after Not telling about raising public pension age It causes widespread hardship to women now in their 60s, and after Webb and This is Money, older married women and widows An estimated £1.5bn of public pension arrears.

Parents who miss credit can make up for it by working enough years before retirement to pay for national insurance, or by qualifying in other ways, such as becoming a caregiver.

However, this is not a guarantee, and by the time parents reach retirement age, they may find themselves married to partners who are not necessarily wealthy and who are disqualified for child support due to their high incomes. was not limited.

Labor, on the other hand, has been complicit in the matter, stating:

Matt Rodda, Shadow Pensions Minister at the Department of Labor, said of the decline in child benefit claims and the implications for future public pensions:

“It is very worrying that this Conservative government still refuses to find a solution, even though their own experts have raised the issue. Do you not take the necessary action for

Dark parents over child allowance, relationship with pension

Helen Morrissey, head of retirement analysis at Hargreaves Lansdowne, said: “For some families, it’s easier than going through the challenges of claiming benefits and then effectively repaying them through self-assessment. It would have been much easier to not claim benefits at all.

“But many simply didn’t realize that by not claiming child benefits, they could lose credibility in the all-important national insurance that helps build public pension eligibility. .

“Although an option has been introduced to opt out of receiving child benefits and still receive a National Insurance credit, it is still possible that people are unaware of this option.

Additionally, charges can be traced back three months, so there’s only so much you can do to remedy the situation.

Quilter Tax and Financial Planning Specialist Shaun Moore said:

“Most parents can swear that the first few months of a baby’s life are drowsy, and you don’t have to worry about filling out any paperwork.

“This is a problem that has plagued the system for years and it is amazing that it has taken this long to address.

“Thousands of parents have failed to claim their legitimate interests for years. Because of the difficult prospect of

“Parents who do not claim child benefits may not receive the NI credits they are entitled to receive, which may reduce public pensions when they reach retirement age.

“This is especially problematic for stay-at-home moms and low-income individuals who rely on these NI credits to maintain their pension entitlements.”

Stephen Cameron, Pensions Director at Aegon, said:

“If a parent is entitled to child benefits but the parent or their partner earns more than £50,000, a special tax may be levied which may offset the payment of child benefits.

“While this makes some people hesitant to claim it, claiming it has another important advantage that many are not aware of. Enrolling in child benefits allows parents to add to their future public pensions.” You can receive national insurance credits.

“35 years of NI credit is required to receive a full public pension. I have.

“In the future, per the final rule, those who find themselves in this position will be able to make retroactive claims. This measure is a useful step towards narrowing the pension gap between men and women.