Okay, the title of this post may be somewhat ‘stating the obvious’ but research by the Royal London suggests that many thousands of new mothers are not claiming child benefit. Why? Because of the High Income Child Benefit Charge (HICBC) which reduces the value of that benefit to £nil where the women’s partner earns over £60k. And that’s a problem: Although child benefit may be worthless to the mother now, it may be important in the future as it helps build entitlement to the State Pension. The Royal London estimate that for every 1 year of child benefit lost, the mother will miss out on around £5k of State Pension over her retirement.
So, if you are a new mother, have not yet claimed child benefit and won’t otherwise receive National Insurance credits (i.e. you aren’t working) then best get a claim in ASAP. To get around the HICBC issue (i.e. receiving child benefit and then having to pay it back through the HICBC) you can opt to receive £nil when making your claim for child benefit.
If you would like some assistance or have any questions on the above or any other areas of accounting or tax, please contact us at email@example.com
Applause Accountancy Services Limited takes every care in preparing material to ensure that the content is accurate and up to date. However, no responsibility for loss for anyone acting from or refraining from acting as a result of this information can be accepted by Applause Accountancy Services Limited.