Thousands of grandparents across the UK are discovering they could receive up to £6,600 extra on their state pension simply by caring for their grandchildren.
The Government's specified adult childcare credits scheme allows family members to claim National Insurance credits when they look after children under 12.
As parents return to work following the summer break, grandparents who help with school runs and after-school care could qualify for these valuable credits.
Each year of credits adds £330 to annual state pension income, meaning those who care for grandchildren over 20 years could see their retirement income increase by nearly £6,600.
The scheme works by transferring unused NI credits from working parents who receive child benefit to the family members providing childcare.
Research from wealth manager Quilter from HMRC found applications for these credits have soared by 43 per cent in the past year alone. Data obtained through a Freedom of Information request shows 42,964 people applied between October 2023 and September 2024.
This represents more than double the number of applications submitted just four years earlier. Over the past five years, 131,594 people have applied for the credits, with 104,433 applications approved successfully.
The figures suggests growing numbers of families are becoming aware of this often-overlooked benefit
| GETTYThe figures suggests growing numbers of families are becoming aware of this often-overlooked benefit.
Jon Greer, head of retirement policy at Quilter, said: "Applications for specified adult childcare credits are surging as more families catch on to the fact that looking after grandchildren doesn't just help with childcare but can also boost your retirement income."
The system enables working parents who claim child benefit to pass on their associated NI credits to relatives providing childcare. These relatives must be under the current state pension age of 66 to qualify.
People can currently check their state pension forecast online | GETTYFamily members eligible to receive the credits include grandparents, aunts, uncles and older siblings. The scheme requires no minimum hours of care, meaning even occasional school pick-ups and supervision can count towards building pension entitlement.
The credits were introduced in 2011 to support those who reduced their working hours or stopped employment to care for young relatives. Applications can be backdated to April 2011, though claims for specific tax years must be submitted after 31 October of the following year.
Applications face rejection for several common reasons. Individuals who already possess a qualifying year of National Insurance contributions through employment or other credits cannot claim these childcare credits for the same period.
Those who receive child benefit payments for the children they care for are also ineligible,
| GETTTYThose who receive child benefit payments for the children they care for are also ineligible, as NI credits are automatically allocated to them. Only one credit can be claimed per household receiving child benefit, even when multiple children require care.
Greer emphasised the need for greater awareness: "Each year of credit is currently worth £330 on your State Pension and yet awareness remains far too low.
"Many eligible grandparents could be missing out on thousands of pounds simply because they don't realise they qualify or how to apply."