Many grandparents in the UK may be missing out on a valuable financial benefit that could significantly increase their state pension. Specified Adult Childcare Credits, a form of National Insurance (NI) credit, allow grandparents to claim a boost to their future pension payments when they provide childcare for their grandchildren. Despite this opportunity, a large number of eligible individuals remain unaware of the scheme.
With many parents returning to work after the summer holidays, more grandparents are stepping in to help with childcare. Yet, according to research from wealth manager Quilter, only a fraction of those eligible are claiming the benefit, potentially leaving thousands of pounds unclaimed. Here’s why grandparents should be aware of this chance to boost their pension pot.
What Are Specified Adult Childcare Credits?
Specified Adult Childcare Credits allow grandparents and other eligible family members to receive National Insurance credits for looking after children under 12 (or 17 for children with disabilities). These credits can directly affect the amount received from the state pension. To qualify for the full state pension, which is worth £230.25 per week, individuals need 35 years of National Insurance contributions. The credits offer a way to bridge gaps in contributions for those who may not have had enough paid work to secure a full pension.
The scheme, first introduced in 2011, allows eligible grandparents to claim one credit per child whose parent receives child benefit. The National Insurance credits are transferred from the child’s parent to the grandparent providing the care, boosting the carer’s pension entitlement. Each year of credited care can add £330 to a pension, which, over 20 years, can amount to nearly £6,600, according to Quilter.
Why Are So Many Missing Out?
Despite the financial potential, many grandparents fail to apply for the credits. Research from Quilter indicates that only 104,433 people have claimed the credits in the last five years, with just 42,962 people making a claim in 2024. This underwhelming uptake is concerning, especially when 78% of applications are successful.
The reasons for the lack of claims are varied. Many eligible individuals may not be aware of the scheme or how it works. According to Jon Greer, head of retirement policy at Quilter, “Many eligible grandparents could be missing out on thousands of pounds simply because they don’t realise they qualify.” To apply, grandparents must be under state pension age and provide care for a grandchild while the child’s parents claim child benefit.
How to Apply
Grandparents who are eligible for the credits should act now to ensure they don’t miss out. To claim, they will need to wait until after October 31 for the current tax year. A simple online application form (CA9176) must be completed, alongside the details of the child being cared for and a declaration from both the grandparent and the child’s parent.
Before applying, grandparents should ensure that the child’s parent has a qualifying National Insurance year and that the child is under the age limit. The Specified Adult Childcare Credits scheme offers a straightforward but significant way for grandparents to increase their pension income. By simply providing childcare for a grandchild, they could ensure a more financially secure future.
