Helping to prevent mothers from ending up with reduced state pensions

4 min read



Our petition aimed to help stop thousands of mothers across the UK ending up with lower state pensions

Purple pram

We've previously spoken about a problem affecting thousands of families as a result of child benefit rule changes that took place in 2013. As well as making sure members are aware of the issue, and that they (and their family members) can take steps to avoid the problem, in 2018 we launched a campaign to try to get the rules changed.

What’s the problem?

The problem came about as a result of the introduction of the High Income Child Benefit Tax Charge in January 2013. Under this scheme, where one parent in a family receiving child benefit earns more than £50,000 a year, the higher earner is sent a tax bill. The size of the tax bill depends on how much they earn, but if they earn £60,000 or more, then the tax bill wipes out the value of the child benefit that’s being paid to the family.

Why is it so important?

Since 2013, tens of thousands of parents – mostly mothers – have responded by not claiming child benefit. They’ve decided that having one parent receiving child benefit and another parent getting a tax bill of the same amount is a bit of a waste of time. The problem is that by opting out of the child benefit system, they’re missing out on valuable National Insurance credits that help to protect their National Insurance record for periods when they’re out of paid work – to look after their children, for example. As a result, we think that many tens of thousands of mothers could be looking at a reduced income in retirement unless something is done.

We’re particularly concerned about this because there are strict rules on how far child benefit claims can now be backdated. Even mothers who become aware of the issue now may find that they’ve lost out on years of credits towards their pension and can do nothing about it.

fifties style purple glasses

Changing the system

With so much evidence that women tend to end up in retirement with poorer pensions than men, we think it’s vital that the Government tackles this entirely avoidable problem, which could make matters worse. So we placed a petition on the Parliament website calling on the Government to make two changes:

  1. To lift the strict limits on backdating, so that when parents become aware of what they’ve lost they can make a claim back to 2013 if necessary.
  2. To use birth registers and other information to identify the mothers who are missing out and actively contact them, rather than wait until they find out about the problem themselves.

The petition closed in May 2019 and received almost 14,000 signatures. You can read the Government's response on the petition website

Watch our video to find out more

CAPTION: We’ve launched a new campaign to help prevent mothers from ending up with reduced state pensions as a result of changes to the child benefit system. So, what’s it all about?

STEVE WEBB: I’m Steve Webb, Director of Policy at Royal London.

BECKY O’CONNOR: I’m Becky O’Connor, Personal Finance Specialist for Royal London, and we’re talking today about child benefits, and National Insurance credits, and how mothers are missing out on millions as a result of a strange quirk in the way the child benefits system connects with National Insurance.

STEVE WEBB: A few years ago I wrote a report called Mothers missing out on millions. It was about the fact that when you claim child benefit, you also as well as getting the cash, you get something called a National Insurance credit which helps with your state pension. That system was working fine until recently, but of late many thousands of mothers have stopped claiming child benefit because of the change to the tax rules, and as a result of that they’re now suffering poorer state pension and that’s an issue we think needs addressing.

BECKY O’CONNOR: Child benefit is an entitlement that has been around since the ‘70s. It used to be paid to all families in the UK at the point you had children, you would get some child benefit. It was to help with the costs of having children.

STEVE WEBB: It’s quite surprising that there’s any connection at all between claiming a benefit for having children and something to do with retirement. What happened was society in the 1970s said well hang on a minute, lots of mums, and it was mainly mums, are staying at home, looking after a child, doing something very valuable but because they’re not in paid work they’re not paying National Insurance, and paying National Insurance was always the key to building up a national insurance pension in retirement. So, back in the 1970s, the idea was introduced of credits towards your pension, so that by claiming child benefit you were treated as if you had paid National Insurance, so you protected your pension record.

BECKY O’CONNOR: In 2013 something called the High Income Child Benefit charge was introduced which made it need tested for the first time. With the introduction of the charge, anybody within a household where one person earned more than £50,000 was liable for the charge. Between £50-60,000 the amount of the charge increases until when it gets to £60,000 child benefit is totally cancelled out.

STEVE WEBB: And so what families have responded by doing is thinking: ‘what’s the point?’ If I’m going to get child benefit in one hand and my partner’s going to have a tax bill with the other, it’s a complete waste of time. But unfortunately what many have failed to realise is that they’re throwing away something else, a valuable credit towards their eventual state pension.

BECKY O’CONNOR: And that’s how the problem’s come about. It’s simply people not realising that in choosing not to fill out a child benefit form they miss out on this potentially really valuable thing that will affect their state pension entitlement later on.

Working mothers and families stand to lose out potentially thousands of pounds when they reach state pension age if they haven’t taken National Insurance credits over the years, and the problem is that they don’t know that until they’re actually at that point when they’re taking their pension. They then may potentially be really disappointed that they’ve missed out on maybe £250 a year, which obviously if you’ve spent a long time out of work, can add up to thousands in your retirement.

Women tend to be the family member that stays at home when children are born and for often many years until they go to school or secondary school. There are more stay at home dads now than there used to be but historically the issue of staying at home and leaving the work force has been a women’s issue.

STEVE WEBB: In general women tend to do worse in retirement, so it’s vitally important that this credit that they get for claiming child benefit that helps to protect their state pension, is something they’re actually getting. So we want people to claim what they’re entitled to.

First of all we’re very keen that mothers, families claim their child benefit because of the valuable credits that they would otherwise be missing out on. But we’ve also put a petition on the parliamentary website which calls on the government to relax the time limit on claims because if you discover now, perhaps hearing us today that you missed out a few years ago, it might be too late. The other thing we want the government to do is contact the women affected.

BECKY O’CONNOR: Life is very busy but it’s definitely worth taking a look at the child benefit website. If you haven’t already filled out the claim form because you think it’s not for you anymore, fill it out. There’s a box that you can tick that says that I don’t need the money, I just want to make sure that you know I exist and I want National Insurance credits.

STEVE WEBB: We’d love Royal London members, if they share our views and our concerns, to sign the petition so that we can get the government to change the system to be fairer to all.

CAPTION: You can help us to try and get the system changed by signing our petition at We’d really appreciate your help.

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