Thousands of women face reduced state pension due to Child Benefit changes

Royal London estimates that there are approximately 50,000 mothers in families with a child under 5 who have completely opted out of receiving Child Benefit having previously received it. In addition, an estimated 160,000 have started a family since 2013 and have decided not to claim child benefit.

A woman who had a child after the rules changed in January 2013 and has not claimed benefit could have gaps of up to five years in her NI record, costing 5/35 of the full rate of the state pension which is around £160 per week.

Based on a typical twenty year retirement, Royal London estimates that this could cost over £23,000 in lost state pension rights, and families are not allowed to make a backdated claim for missing credits. 

It believes the total amount in future pension rights lost since 2013 could already have exceeded £1 billion.

Helen Morrissey, personal finance specialist at Royal London, said: “For the last forty years, the National Insurance record of mothers has been protected through valuable credits which mean that time spent at home with young children does not impact on their state pension. 
 
“But since 2013, growing numbers of mothers have either opted out of child benefit or have not claimed in the first place because of a new tax charge on higher income couples. This is doing permanent damage to their state pension prospects. 
 
“It is outrageous that in the anniversary of women winning the right to vote, the government is overseeing a state pension system which penalises women for having children.  
 
"The Government needs to make sure that all mothers claim their national insurance credits, and to allow backdated claims. Otherwise, the cause of women’s pension equality will be set back a generation.”