Former pensions minister launches petition over pension credits
Steve Webb, the former UK Pension Minister is the latest political heavyweight to join the ongoing debate on mis-sold pension claims in the UK. Webb is urging the UK government to allow parents to file claims for backdating the state pension credits based on the current child benefits. Eligible parents with a child aged below 12 still receive national insurance credit as the state pension.
Even recipients, who are not currently in paid work, will still be considered to have contributed while filing retirement benefit claims. Webb who is currently working at Royal London, as the director of policy, has told FT Adviser that some parents do not relate state pension with child benefit. Those who do only succeed to make a backdated claim based on the past three months.
All the years lost will also remain permanent on the recipient’s state pension. In 2013, the UK government created a high-income child benefit tax fee for couples, especially when one of the partners earns £60,000 or more each year.
Unfortunately, the payments affect the value of the child benefit and discourage a section of couples from applying. As by Nov 16, the petition which was launched on the British government and parliament online site had only received 199 signatures. Webb’s objective is for the website to record over 10,000 to pressure the UK government to provide a satisfactory response.
Webb is also pressuring the UK government to contact the affected couples as a way of raising public awareness about the potential of losing the state pension credits in the future. The government just needs to compare the list of UK children covered by the child benefit with the list of those born since 2013 to contact mothers who are not filing claims.
According to the petition, 8 out of 9 recipients are women, but the same provisions will apply to fathers as well. The mis-sold pension claims are expected to take several legal and public twists in the coming days. According to the information shared by HMR with the
“Treasury Select Committee,” only 70% of the 7.4 million applicants of child benefit in 2017 chose not to file the child benefit claims. Another comprehensive review by Royal London observed that the 2013 reforms to child benefit system could have cost UK fathers or mothers over £23,000 in form of state pension rights as per the 20-year retirement plan.
Esther McVey, the secretary of state for “Work and Pensions,” has urged British parents to make sure they are fully included in national insurance credit as one of the effective ways of enhancing their state pension credits. Every yearly pension credit is worth £244 each year as state pension translating to£4,880 under the typical 20-year retirement plan.
The current controversial rules only allow couples to backdate the credits for only three months if they file the child benefit claims late. Webb’s petition focuses on two crucial things; pressuring the government to contact mothers with missing state pension credits and backdating credits to help mothers update their records after realizing that they have missed out the state credits.
Majority of UK parents facing mis-sold pension claims remain optimistic that the government will address the two pertinent issues raised by Webb.