Mothers missing out on pension credits

I was sat with a client the other day who is currently off work with her two young children, she is enjoying her time with the children but was unaware that it could be costing her more than she thought. 

In this instance she was not claiming child benefit due to her husband’s earnings and the changes made to child benefit in 2013. It effectively means that if one of you earns over £60k per annum you effectively lose the child benefit in tax. This has resulted in a lot of families not claiming it as it’s perceived to be not worth it if it is all going to be claimed back in tax.

However, by claiming child benefit you automatically receive tax credits towards your state pension, even if the child benefit is subsequently reclaimed. Thousands of women like my client are missing out on maximising their state pension.

Ex-Liberal Democrat MP Steve Webb said new HM Revenue and Customs statistics show the number of mothers missing out on pension rights has doubled in two years. Analysis by mutual insurer Royal London, where Mr Webb is director of policy, suggests they have lost out to the tune of hundreds of millions of pounds.

Mr Webb said: “Tens of thousands of mothers with young children are missing out on vital state pension rights. This risks setting back the cause of equality for mothers by a generation. HMRC were alerted to this problem in 2016 and have done nothing about it. These new figures are a damning indictment of a system that is no longer working for families.”

But Royal London have highlighted that this could be costing mothers up to £231 per year in state pension, or thousands of pounds over the course of retirement.

Statistics cited by Royal London show that before the 2013 changes the number of families in receipt of child benefit was going up every year since 2007. Since the change the number of families claiming has been in decline.

Royal London estimates that the number of mothers missing out on credits towards their state pension has doubled in the last two years and now stands at about 50,000.

A Government spokeswoman said: “We have always been clear that families can submit the Child Benefit claim form to help protect their future right to the State Pension. We provide specific information to all new mothers and on If anyone is worried about their National Insurance record, they can contact HMRC at any time to check how many years of credits and contributions they have built up.”

I had a look at the website quoted and it really wasn’t that clear.

So, I recommend that you have a look at your own situation and mention it to any other friends and family with young children.


Wendy Devlin Dip CII, CeFA, CeMap (MP & ER)


This information is provided strictly for general consideration only. No action must be taken or refrained from based on its contents alone. Accordingly, no responsibility can be assumed for any loss occasioned in connection with the content hereof and any such action or inaction. Professional advice is necessary for every case. It does not constitute legal or tax advice and must not be treated as such. All statements concerning taxation are based on our understanding of the current law and HMRC practice, and proposed changes, as at the date of publication. Levels and bases of, and reliefs from, taxation are subject to change.  The provision of advice in relation to taxation is not a regulated activity.