Child benefit - registering is a must for stay at home parents.

Nicky Morgan, the MP for Loughborough has written an article about child benefit today which has been published on inews.co.uk.

It is about the need to register for child benefit to make sure you receive the proper state pension. If you are a stay at home parent caring for your children.

Many of us may not realise the implication of not claiming for child benefits. So we are sharing Nicky Morgan’s article which puts some clarity around the issue.

“Stay at home parents risk losing thousands from their state pension if they don’t register for child benefit.”

Nicky Morgan MP said in her article:-
“Stay at home parents risk losing thousands from their state pension if they don’t register for child benefit.”

“When new parents are thinking about their household finances, many will consider claiming child benefit. Many will not, however, think about National Insurance credits. Yet registering for child benefit builds up entitlement to the state pension for parents of children under 12.  [Who] don’t build up National Insurance contributions for another reason, such as through work.

“Put simply, a stay-at-home parent needs to register for the benefit in order to get the National Insurance credits needed for the full state pension. For households where the stay-at-home parent doesn’t register, but the earning parent does, the stay-at-home parent could lose thousands of pounds of retirement income.”

3% of households may not be benefiting from the available National Insurance credits.

However, in new data obtained by the Treasury Committee. HMRC estimates that of the 7.9 million households in the UK receiving child benefit, around three percent – more than 200,000 households – may not be benefiting from the available National Insurance credits because the child benefit is claimed by the higher earner.”

“This is the first time we have an idea of just how widespread this problem is. Unfortunately, it is not the only problem with child benefit and National Insurance contributions.”

“The other wholly foreseeable problem. In fact, the Treasury Committee warned seven years ago this may happen. Stems from the high-income child benefit charge. Where parents who weren’t going to get the money from a benefit wouldn’t think to register for it in order to get credits that they may not even know about.”

“The Government’s information about state pensions clearly isn’t up to scratch; it needs to pull its finger out and put this right urgently. To ensure that parents don’t miss out on their pension entitlement.”

“This is a mess. People may not realise that they have been impacted until they come to retire. By which time it will be too late to rectify.”

HMRC need to develop clear information for families.

“HMRC has previously told the Committee that a communications strategy to provide parents with clear information about how their pension entitlement could be affected was being developed. Yet these figures show that HMRC and the Department for Work and Pensions have not been successful in targeting its communications at households where this is a risk.”

“What to do if you are in this situation. Households can either change the child benefit claimant from the earning-parent to the parent with low-or-no income. Or the earning-parent can stay as the claimant. [And] just the National Insurance credits can be transferred to the parent with low-or-no income.”