The government has announced plans to address the fact that some parents who have not claimed child benefit could miss out on building their state pension as part of its 2023 Tax Administration and Maintenance Day.

Whilst the current rules mean that those who have missed out on child benefits can only backdate a claim for three months, the new proposals would allow those affected in future to claim National Insurance credit retrospectively.

The government clarified that parents do not need to take any action immediately, confirming that it intends to legislate to allow eligible individuals to retrospectively claim National Insurance credit, with the next steps to be taken to be published "in due course".

Industry experts welcomed the announcement, with Aegon pensions director, Steven Cameron, suggesting that, as it’s more often women who take career gaps to care for children, this measure could be a “helpful step towards reducing the gender pensions gap”.

“It’s great news that eligible parents who didn’t claim child benefit will be able to claim state pension credits retrospectively,” he continued, emphasising that those taking a break from employment, but not claiming child benefit, could leave a parent short of the 35 years of National Insurance credits needed, meaning that their state pension is reduced.

LCP partner, Steve Webb, also said that the announcement is “extremely welcome”, agreeing that whilst it is understandable that some parents may choose not to claim child benefit payments, it is "vital" that parents do not damage their state pension as a result.

“I am delighted that the government has finally listened to campaigners and plans to make changes which will boost the state pension of thousands of parents, and particularly many mothers who might otherwise have missed out," he added.

Quilter tax and financial planning expert, Shaun Moore, also argued that it is “laughable” that this can only be backdated by three months, emphasising that the first few months after a baby is born is a blur without having to worry about filing in paperwork on top.

"This is a problem that has plagued the system for years, and it is astounding that it has taken this long to address it," he continued. "The government now intends to legislate to allow eligible individuals to retrospectively claim National Insurance credit with more detail set to be published.

Adding to this, Hargreaves Lansdown head of retirement analysis, Helen Morrissey, said: We await further detail but anything that helps affected parents reclaim more of these credits retrospectively can make a huge impact on people’s retirement prospects.”

The measures were announced as part of the 2023 Tax Administration and Maintenance Day, which was focused on tax simplification and modernisation, and tackling the tax gap.

Other measures announced as part of the package included plans to simplify the Help to Save scheme and tacking promoters of tax avoidance, with a total of 23 technical tax updates published.

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