Thousands of grandparents providing childcare could be eligible for National Insurance credits that increase their state pension
Thousands of grandparents across Britain could be missing out on up to £7,170 in additional state pension payments by failing to claim an HM Revenue and Customs (HMRC) scheme that rewards those providing childcare.
The Specified Adult Childcare Credits scheme allows eligible grandparents and other family members to fill gaps in their National Insurance record, potentially increasing their state pension entitlement.
Despite the scheme being available, awareness remains low among grandparents who regularly care for their grandchildren.
Research from Confused.com found that 62 per cent of grandparents look after their grandchildren without receiving any financial compensation.
With many families relying on grandparents for childcare during the summer holidays, the scheme could provide a valuable boost to retirement income for eligible carers.
The research found grandparents typically care for their grandchildren for around two days a week.
Almost three in 10, or 29 per cent, provide childcare for three days or more each week.
Despite this commitment, many are unaware they could receive National Insurance credits through the scheme.
HMRC figures show that 42,964 applications for Specified Adult Childcare Credits were submitted during the 2023-24 tax year.
While tens of thousands of grandparents have successfully claimed the credits, the figures suggest many more eligible people may not be applying.
Under the scheme, a working parent or primary carer can transfer National Insurance credits linked to their Child Benefit claim to a grandparent or another eligible family member who regularly provides childcare.
The transferred credits can help fill gaps in the recipient's National Insurance record, increasing the amount of state pension they receive in retirement.
Claims can be backdated to 2011, meaning some grandparents could receive a significant increase to their future state pension entitlement.
To qualify, the person providing childcare must have looked after a child under the age of 12.
They must also have been over the age of 16 but below state pension age during the relevant tax year.
The parent or primary carer must agree to the transfer and countersign the application.
Parents should also check they have National Insurance credits available to transfer before making a claim.
The research comes as families continue to face rising childcare costs.
According to Confused.com, parents expect to spend an average of £339 per child on childcare during the six-week summer holiday.
Tara Evans, personal finance editor at Confused.com, said: "Grandparents are quietly providing an enormous amount of childcare for families across the UK, helping parents stay in work while saving them hundreds or even thousands of pounds in childcare costs each year.
"But our research suggests many families are missing out on a valuable pension benefit simply because they don't know it exists.
"The application is relatively straightforward, and for people who have gaps in their National Insurance record, these credits could make a meaningful difference to their state pension in retirement."
