Important pension protection lost by many working couples

Families across the UK could be missing out on millions of pounds of additional pension income as they fail to realise the connection between claiming child benefit and protecting their state pension record.

In January 2013 the Government introduced the High-Income Child Benefit Tax Charge, which saw a tax charge incurred if a parent receives child benefit, but is earning £50,000 per year or more.

This charge increases on a sliding scale until earnings pass £60,000, at which point the value of the child benefit is equal to the charge being levied.

Many high-income couples no longer bother to claim child benefit as a result, but they may be missing out on an integral pension protection.

It would seem that there is no point claiming for a credit only for it to be taxed, but the rules also allow partners to get credits towards their state pension, even if they don’t receive the child benefit.

To assist taxpayers the Government has even included the option to allow couples to defer the child benefit payment but accept the National Insurance credits.

Couples who have chosen to opt out of the child benefit system are therefore being reminded to check their current situation to ensure they maintain the state pension protection afforded to them.

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