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Are you a grandparent providing holiday childcare? Don’t miss out on pension boost

Rebecca Goodman
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Rebecca Goodman

Six in 10 grandparents will care for their grandchildren over the summer holidays, but many may not know they can claim valuable credits to boost their pension in the process.

Grandparents will spend an average 250 hours looking after their grandkids over the summer holidays, according to research from Railcard, as working parents juggle childcare with their careers.

But 60% of over 50s in the UK don’t know that National Insurance credits can be claimed as a carer or grandparent to boost their future state pension entitlement.

In fact, according to research from mutual Royal London, just one in 10 adults over 50 years of age have tried to claim these valuable NI credits with a year adding over £6,000 over the course of retirement.

Specified Adult Childcare Credits

Any grandparents under state pension age who look after their grandchildren on a regular basis can apply for Class 3 National Insurance credits under the Specified Adult Childcare Credits scheme. These are not credited automatically and need to be applied for via HMRC (using form CF411A).

It’s available for those providing care for a child aged 12 or under while the child’s parent or carer is working.

The system allows for working parents to transfer the usual child benefit credits they receive to the grandparent, requiring both to apply for this.

But Royal London found there’s general uncertainty around the state pension, with a third of over 50s unaware they need 35 years of NI credits to claim the full state pension and 10 years to be entitled to any state pension at all.

For any grandparent looking after grandkids, claiming this credit could be worth £5.82 a week or £304 per year.

Although an incomplete NI record affects both women and men, more women are likely to have stopped work because they’re caring for children, elderly relatives, or for health reasons, and have gaps in employment, contributing to the gender pensions gap.

Meanwhile, Royal London’s research revealed a third of adults aged between 50 – 69 have found gaps in their NI record. Adult childcare credits can be backdated until 6 April 2011.

‘Lack of awareness of this care credit’

Clare Moffat, pensions expert at Royal London, said: “Many grandparents find looking after the grandchildren hugely rewarding. Not only does regular care help keep them mentally and physically active, it can also boost their retirement income, but only if they claim the credit that goes towards their state pension.

“The cost-of-living crisis and phenomenal rise in childcare costs has meant grandparents have increasingly been called upon, but there is a lack of awareness of the ability to benefit financially in terms of their own state pension – extremely useful for anyone with gaps in their record.

“For most people, the state pension provides the foundation for their retirement income and it can make a big difference if you have gaps. So, it’s really important to check your record and claim what you’re entitled to.”

Related: Deadline to plug National Insurance Contributions gap extended to April 2025