We’ve fallen into the Child Benefit state pension trap – should we buy more years? STEVE WEBB responds

My wife and I have been caught by the child benefit state pension trap about what you’ve written before.

In essence, we never claimed child benefit (as we understood it would be gradually reduced) and we did not realize the impact this would have on national insurance contributions.

As a result, there were several years between 2013 and now when my wife was not working and was a full-time carer, leaving gaps in her NI record.

In your article you mentioned that the Government plans to allow families to repair their NI records from April 2026. At the same time, I am aware that there is a deadline to top up historical NI contributions, which ends in April 2026. 2025.

My question is: should we pay to top up my wife’s historical contributions now (before April 2025) and then hopefully be able to claim those top-ups in 2026?

Or should we wait and trust the government’s proposed repair process, avoiding the need to pay up front? Clearly, the risk of the second approach is that the “repair” process will not materialize.

I would appreciate any ideas or advice you can give me. I imagine this question might also be relevant to other readers who find themselves in a similar situation.

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Steve Webb responds: One of the most valuable features of the National Insurance system is that it provides “credits” to certain groups who have not actually paid National Insurance contributions in a given year.

These credits help protect the NI record of those who are not in paid work due to caring responsibilities or who are claiming benefits because they are unable to work due to health problems etc.

Until the high-income child benefit charge was introduced in 2013, uptake of child benefit was close to 100 per cent and anyone in receipt of child benefit who had a child under 12 (or under 16 before 2010) automatically gained protection on your NI record in respect of your state pension.

But once higher-income families faced a tax burden that could wipe out some or all of the value of Child Benefit, hundreds of thousands of people, like you and your wife, decided not to claim Child Benefit.

Unfortunately, this meant he also lost the associated National Insurance credit. And even if you submitted a child benefit claim now, this would only be three months old, leaving your wife with several years of gaps on her NI record.

The original “workaround” introduced by the government was that people would be allowed to claim Child Benefit NI credits, but not the benefit itself.

This meant getting a Child Benefit claim form and filling it out, but ticking a box to say you didn’t actually want the money, just the credits on your NI record.

It is not surprising that many people were unaware of this system and it never occurred to them that they should fill out a benefits claim form but ask not to be given the money.

The previous government belatedly realized that many mothers (in particular) were at risk of receiving reduced state pensions due to multi-year gaps in their NI record during periods when child benefit was not claimed .

The proposed solution was a new category of NI credit for those who would have obtained NI credits if they had claimed child benefit (since 2013) but did not do so due to the high income charge.

However, although the intention to introduce this new system was announced, no legislation has been implemented or published so far.

My guess is that the new government is likely to carry out the policy announced by its predecessors.

You could imagine that a Labor government would be concerned about the “gender pension gap” and would want to take action to prevent a new gap in state pensions arising over the issue of child benefits.

However, I am not aware that this policy has been formally confirmed by the new Government.

As you say, the ability to pay historic voluntary contributions (going back more than six years) ends on April 5 next year, so if the child benefit arrangement were to be scrapped you’d want to know sooner rather than later. late.

However, I think it would be risky to make voluntary payments in the hope of being repaid when the new credits are introduced.

The best I can suggest is that you (and other readers) ask your local MP to write to the Treasury (which oversees HMRC and the National Insurance system) and ask for written assurances that the new credits will be introduced.

The more letters from MPs a government department receives, the more likely ministers will take note of an issue and give it the priority it deserves.