26 June 2024 , 09:29
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Grandparents who help look after their grandchildren this summer could help boost their state pension by £6,000.
New research from Quilter has highlighted the financial benefit of applying for Specified Adult Childcare Credits. These are awarded when parents sign over National Insurance Credits, which can then in turn help you plug gaps in your National Insurance record.
In order to claim Specified Adult Childcare Credits, you must have been under state pension age (currently 66) when you were caring for a child. The child must be under the age of 12, or 17 if the child has a disability. There isn’t a set number of hours you need to be looking after the child for - and you can backdate claims to 2011.
This means if you were caring someone but now aren’t, you may still be entitled to claim. The parent of the child needs to be entitled to Child Benefit as they’ll be transferring the National Insurance Credit that they usually get with this, across to the grandparent.
Because of this, the parent should also be sure that they’re building up their own National Insurance record for retirement, so they won’t affect their own state pension forecast. It isn’t just grandparents that could qualify - aunties or uncles, or anyone who regularly looks after a child could make a claim.
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Most people need 35 qualifying National Insurance years - some will need more - to claim the full new state pension, which is worth £203.85 per week. You typically need ten years to receive anything at all. This means if you have gaps in your record, you may not qualify for the full state pension - and this is where claiming Specified Adult Childcare Credits could be useful.
Quilter claims Specified Adult Childcare Credits could potentially increase your state pension by £328 annually. Over a standard retirement, this could translate to a financial benefit of over £6,000. It adds that 123,138 people have successfully claimed for Specified Adult Childcare Credits.
Jon Greer, head of retirement policy at Quilter, said: “It is fantastic to see more grandparents and other family members take advantage of Specified Adult Childcare Credits. The numbers of people applying for the credit have been steadily climbing and last year saw the most people apply on record with this year set to top that.
“These credits are not only crucial for securing the full state pension if you have gaps in your National Insurance record, but they are also a cost-effective method of doing so, versus paying to fill in missed years. It’s worth knowing too that the number of hours a grandparent helps out with childcare is irrelevant to the claim. Even if it's just one day a week, eligible grandparents should be able to claim.
“More needs to be done to highlight that these credits are available and to educate people on how to correctly apply so they avoid rejection. If not, this unsung workforce of child carers will fail to benefit despite playing a critical role in keeping the economy going especially over the summer months when working parents struggle with the rising costs of childcare and grandparents step in to save the day.”
You'll need to fill out form CA9176 on GOV.UK to claim Specified Adult Childcare Credits. Both you and the parent transferring the Credit will need to sign the form.