Grandparents’ childcare can enhance state pension by as much as £6,000
More than 120,000 grandparents have boosted their state pension simply by looking after their grandchildren.
But many more could be missing out on up to £6,000 in retirement if they don’t use a little-known trick to increase their weekly income, experts warn.
Specified Adult Childcare credits, commonly known as the ‘grandparent credit’, can be claimed where a parent receiving child benefit is paying National Insurance and is able to work because another family member is looking after a child under 12.
Pension boost: Specified Adult Childcare credits can be claimed if a parent on child benefit is paying NI and can work because a relative is looking after a child
This does not need to be full-time care but could include, for example, dropping off children at school or cover during school holidays.
Anyone with gaps in their National Insurance record can claim these credits to help them qualify for the full state pension, which is worth £221.20 a week.
Only 123,138 people have successfully claimed for the credit in the past eight years, according to data from HM Revenue and Customs obtained by wealth manager Quilter.
Just 22,701 people applied for the credit last year, even though 76 per cent of applications are successfully granted.
There is no minimum number of hours you need to be looking after a child to qualify but you must be under the state pension age, which is currently 66 years old.
Claims can be backdated to April 6, 2011. Applications for the 2023/24 tax year cannot be submitted until after October 31.
John Greer, head of retirement policy at Quilter, says: ‘Even if it’s just one day a week, eligible grandparents should be able to claim.’
Visit gov.uk/guidance/apply-for-specified-adult-childcare-credits for more information.
