Press release:

Child Benefit Axed Along With Many Women's Pension Entitlement, But Can It Be Avoided?
Higher earners, those paying 40% or 50% tax, will have their child benefit axed from 2013, but
child benefit is more than just a weekly sum per child. Along with child benefit payments are the
state second pension (S2P) credits gained by looking after a child under 6. Without claiming child
benefit this will not be recorded and the entitlement lost. Also, each individual needs 30 qualifying
years to claim the full state pension. Claiming child benefit would help many reach the 30 years,
without this many people, mostly women, won't achieve it.

Child benefit will be removed from families where either parent earns enough to pay the higher
40% rate of income tax - currently around £44,000.

People will be expected to declare whether they fall within the higher, 40% and 50% tax brackets,
on their tax returns with the money being clawed back through the tax system.

As a result, people may refuse pay rises or look for other ways to stop the child benefit being
withdrawn. “If paying more into a pension can extend the basic rate band for these purposes, then
contributing more could have the effect of increasing pension provision for free. An earner with
two children and an income £1000 over the basic rate band could pay £1000 into a pension and
have £1750 more through child benefit.” explains Chris Harvey, director of Independent School
Fees Solutions Ltd. “This will also help his or her partner as they will still be earning a qualifying
year towards the state pension and S2P if a child is under the age of six”.

Independent School Fees Solutions Ltd:
Independent School Fees Solutions Ltd are a team of expert Independent Financial Advisors whom
specialise in school fee planning and associated family finances. Their commitment is to
individually guide our clients through their children's school years and beyond through an ongoing
relationship.