State pension warning: Women may miss out on £50,000 due to ‘car crash’ error – act now | Personal Finance | Finance
State pension payments are relied upon by millions of people who will want the sum to be as high as possible. It hinges on National Insurance, with 10 qualifying years usually needed to get any new state pension at all.
Those who later realise the error may be too late, as HMRC only allows backdated claims for three months.
Consequently, Lane Clark Peacock, a firm which analysed the data, has called upon women to take action.
Many may wish to look into whether they are eligible for Child Benefit, or the valuable National Insurance credits which come along with it.
A failure to do so could mean many women are risking damaging their retirement.
Sir Steve Webb, partner at LCP, said: “These latest figures represent a ‘slow motion car crash’ when it comes to women’s state pensions.
“The creation of the ‘High Income Child Benefit Charge’ in 2013 has led to a steep decline in the number of mothers claiming Child Benefit and in particular in the numbers benefiting from National Insurance credits for time at home with children. Without these credits, women could be losing thousands of pounds in retirement income.
“As a matter of urgency, HMRC should scrap its rules on backdating claims so that mothers who realise they have missed out can claim their missing NI credits.
“But there needs to be a fundamental rethink of the way parent at home with children get their state pension rights protected as the current system is clearly seriously broken”.
LCP suggests a woman who started a family in early 2013 who decided not to claim Child Benefit could now have missed out on up to nine years of vital NI credits.
In a worst case scenario, the woman could miss out on 9/35ths of her state pension, as 35 qualifying years are required for the full sum.
At current rates this is a state pension shortfall of approximately £2,400 per year – or around £50,000 in missed pension over the course of a typical retirement.
Express.co.uk has contacted HM Revenue and Customs (HMRC) for comment.
