200,000 parents risk missing out on state pension – HMRC

More than 200,000 parents risk missing out on their future state pension entitlements in families where one parent does not work due to childcare commitments, HMRC has warned.

New research provided to the Treasury Committee by HMRC found that around 3 per cent of UK households receiving child benefits may not be benefitting from National Insurance credits.

When the child benefit is being claimed by the sole-earning member of the household, the non-earner risks losing out on National Insurance credits, and possibly their future state pension benefits as a result.

Treasury Mommittee chair, Nicky Morgan commented: “The Treasury Committee has long-warned the government of the risk that for families with one earner and one non-earner, that if the sole-earner claims child benefit, the non-earner, with childcare commitments, forgoes National Insurance credits and, potentially therefore, their entitlement to a full future state pension.

“Now we have an idea of the scale of this problem, the government needs to pull its finger out and make sure people are aware of the issue and know how to put it right.”

The issue only arises where there is a child under 12 and the actual claimant’s partner is earning below the lower earnings limit and is not receiving National Insurance credits from another source.

However, it does not guarantee that these individuals will miss out on state pension entitlements, as the analysis is a “snapshot in time” and they may build up sufficient qualifying years over their working life.

It is also possible that some of these individuals will be receiving National Insurance credits if they have been transferred from their partner.

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