DWP "must do more" to protect pensions of low income parents

Registering for Child Benefit builds up State Pension entitlement for parents of children under 12 who do not pay National Insurance contributions (e.g. because they decide to stay at home to look after their children).

If the parent doesn’t register for Child Benefit, they may forgo their entitlement to National Insurance credits, and therefore part of their future state pension.

The letter identifies a risk for households where one parent does not work, due to childcare commitments, but the other parent, who does work, is also the Child Benefit claimant. The parent who does not claim Child Benefit, therefore, will not receive the National Insurance credits for State Pension purposes.

Morgan has urged the Department for Work and Pensions "to do more to inform parents with low or no income that they can protect their entitlement to State Pension by transferring National Insurance credits from a spouse, partner or civil partner who claims Child Benefit".

Morgan said: "If the earning-parent in a household receives Child Benefit, rather than the parent with low or no income, the latter parent may be missing out on National Insurance credits, and therefore State Pension entitlement.

"Households can either change the Child Benefit claimant from the earning parent to the parent with low or no income, or the earning parent is able to stay as the claimant and just the National Insurance credits can be transferred to the parent with low or no income.

"DWP must do more to inform parents that either option will ensure that parents with low or no incomes don’t miss out on their pension entitlement."

A DWP spokesperson responded: “We are committed to ensuring no-one should miss out on the State Pension, as demonstrated earlier in September when we urged parents to ensure they receive the valuable National Insurance Credits to which they’re entitled. We will continue to work with HMRC on this issue, and respond in detail to the Select Committee’s letter in due course.”