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The state pension and other financial rules for women  

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01/03/2018
Mothers with young children may miss out on the state pension because of changes to the child benefit rules, figures reveal.

Stay-at-home mothers have their rights to the state pension protected through credits attached to Child Benefit. However, research from Royal London shows that mothers may have lost over £23,000 in state pension rights since 2013 because of the changes to Child Benefit – and are not allowed to make a backdated claim for missing credits.

Those affected are families who either opted out of Child Benefit when the rules changed or who have started a new family since 2013 and decided not to claim Child Benefit in the first place. The figures show that the number of families receiving Child Benefit is 7.38 million compared with 7.92 million in 2012, just before the rules changed.

Many women believe they are automatically entitled to the state pension. This is not the case. To receive the full state pension you need 30 qualifying years of National Insurance Contributions. If you don’t have this, you get the state pension at a reduced rate. You can pay extra to top up your contributions.

What other financial pitfalls should women be aware of?

  • If you’re not married, you’re not automatically entitled to anything. Yes, your partner can put you on their life insurance, or make you a beneficiary of their death-in-service benefit, but you need to make sure they’ve done it or you could have a court battle ahead to win your share.
  • Being a diligent saver isn’t enough – your savings won’t automatically keep pace with inflation, particularly if you leave them all in a low interest rate savings account. Consider stock or bond markets.
  • You won’t automatically get your husband’s pension – some pensions don’t cover a spouse. Worse, your husband is entitled not to leave it to you. Make sure you have your own provision.
  • You need separate accounts – while the ‘joint everything’ idea is very romantic, if you part ways, your joint accounts can be frozen making it difficult for you to get by. Also, if you receive an inheritance and put it into a joint account, you will have to share it on divorce. If you don’t, you won’t.
  • Relying on your husband is a bad financial plan – he may be the greatest guy in the world, but he can get sick, be made redundant, run away with his secretary. Don’t leave yourself with no financial options. Have a plan.

Kay Ingram, director of public policy at financial advisers, the LEBC Group, said: “We see a lot of women who assume everyone gets the same state schemes, or an automatic widows scheme. Cohabitees are particularly vulnerable and can pay considerable inheritance tax. It’s very important to ensure that the right nominees are on your pensions .”

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