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Calling all grandparents! Don’t miss out on £5k pension boost

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Written by: Danielle Levy
20/05/2019
Hundreds of thousands of grandparents may be missing out on national insurance credits, which could boost their state pension by as much as £5,000.

Under a government scheme called ‘specified adult childcare credit’, a grandparent or other family member who looks after a child under the age of 12 while the child’s parents are at work can benefit from a National Insurance credit.

These credits are then added to the grandparent’s National Insurance record and, if they are still under state pension age, can help them to increase their state pension contributions. There is no minimum hours requirement, and claims can be backdated to when the scheme was first introduced in 2011.

However, figures from a Freedom of Information Act request by insurer Royal London revealed just 10,000 people were benefiting from the scheme.

With more than seven million grandparents in Britain with grandchildren under 16, and around two thirds of all grandparents looking after their grandchildren according to charity Grandparents Plus, this is only a fraction of the people who could benefit.

Steve Webb, director of policy at Royal London and former pensions minister, described the 10,084 grandparents who have claimed credits as “a drop in the ocean”.

“It is increasingly common for grandparents to spend some time each week looking after their grandchildren, often to enable a parent to go out to work. It would be quite wrong if these grandparents suffered financially in terms of their own state pension as a result.

“This scheme needs to be much better publicised and I would encourage any family with a grandparent under pension age who helps out with the childcare to find out more,” he explained.

He added that one year of credits could be worth 1/35 of a full pension because 35 years of contributions are needed for the full rate.

The full state pension is currently £8,767 per year and 1/35 of this is around £250. This means that someone who claims these credits for a year could get an extra £250 on their pension, or around £5,000 in total over the course of a typical 20-year retirement.

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