Grandparents can boost their state pension by thousands by looking after grandchildren this summer

Grandparents and children in pictures

Each extra National Insurance credit can add around £303-a-year to the full, new state pension

Temi Laleye

By Temi Laleye

Published: 19/06/2024

- 14:08

Each extra National Insurance credit can add around £303-a-year to the full, new state pension

Grandparents are urged to claim all the extra cash they may be entitled to for retirement as more parents rely on them for childcare.

More than half (57 per cent) of parents with children aged under 13 rely on childcare support from at least one grandparent, a survey has found.

More than half (52 per cent) of parents who receive childcare support from grandparents agreed they feel “trapped” regarding where they live, according to the research for property website Zoopla.

Soaring childcare costs mean that a growing number of parents are turning to grandparents to look after their children when they return to work.

Grandparents who care for grandchildren can claim National Insurance (NI) credits to potentially increase their state pension by thousands of pounds over the course of retirement.

For example, a year’s worth of National Insurance credits amounts to 35th of their full state pension, or £5.82 a week, £302 a year, or around £6,057 over 20 years in retirement.

Grandparent and grandchild sitting on sofa togetherGrandparents could boost state pension payments by filling gaps for free ALAMY

According to research by charity Age UK, a fifth of grandparents over the age of 50, or around 5million people, currently provide regular care for their grandchildren.

Around 21,000 people applied for Specified Adult Childcare credits last year, according to latest figures from HMRC revealed by a Freedom of Information request, and 17,000 qualified.

Specified Adult Childcare works by transferring the National Insurance credit attached to Child Benefit from the Child Benefit recipient to a family member who is providing care for a related child under 12, or 17 if they have a disability.

People will receive a Class 3 National Insurance credit for each week or part week they provided care for the child, but there is only one credit available for each Child Benefit claim - no matter how many children are on the claim itself.

Parents who are returning to work can transfer their entitlement to these National Insurance credits to a family member who helps with childcare and who might have gaps in their own National Insurance record.

However, parents only receive National Insurance credits if they are registered to receive Child Benefit, which they are entitled to receive if they earn less than £50,000 a year.

If no one has claimed Child Benefit for the child there is no attached National Insurance credit to transfer and credits cannot be awarded.

A single extra National Insurance credit currently adds around £303-a-year on to the full, new state pension.

The full new state pension is £221.20 a week in the 2024/25 tax year, and the full basic state pension is £169.50 per week.

People need 35 ‘qualifying years’ of National Insurance Contributions (NICs) to qualify for the full amount.

They must have at least 10 years’ to receive any state pension at all.

People can put in a retrospective claim for Specified Adult Childcare going back to April 6, 2011.

Who can apply for Specified Adult Childcare credits?

People can apply as long as:

  • they are an eligible family member who provided care for a child under 12
  • they were over 16 and under State Pension age when you provided care for the child
  • they are ordinarily resident in the UK but not the Channel Islands or the Isle of Man
  • the child’s parent (or main carer) has claimed Child Benefit but does not need the credits themselves

Who counts as an eligible family member

People are classed as an eligible family member if they are the:

  • mother or father who does not live with the child
  • grandparent, great-grandparent or great-great-grandparent
  • aunt or uncle
  • brother or sister

Grandparents or relatives helping with childcare must fill in the form to claim Specified Adult Childcare credits.

The parent of the child will need to sign the document too to confirm they’re caring for their child during a certain period, and that they agree for their credits to be transferred to them.

It should be noted that people can only claim for one credit per household, so if they care for two children in the same household they can only claim once.

Britons can find out how much state pension they’re on track to receive by requesting a state pension forecast, which will include how much they’re likely to receive based on their current NI record, and how much they're likely to get if they continue working up to state pension age - which is currently 66 but is set to increase to 67 by 2029 and again to 68 between 2037 and 2039.

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