Thousands of grandparents could be missing out on more than £7,100 in extra State Pension payments because they are unaware of a little-known HMRC scheme. Specified Adult Childcare Credits allow eligible grandparents and other family members who regularly look after children to boost their National Insurance record, which could increase the amount of State Pension they receive in later life.
How the Scheme Works
The scheme is designed for situations where a parent claims Child Benefit but does not need the National Insurance credits linked to that claim. Those unused credits can instead be transferred to a grandparent or another qualifying relative who provides childcare.
The support comes as grandparents continue to play a major role in helping families manage childcare costs, particularly during the school summer holidays.
Research Findings
Research from Confused.com found grandparents care for their grandchildren for an average of two days a week, while almost three in 10 (29%) provide childcare on at least three days every week. Despite the time they give up, almost two-thirds (62%) do so without being paid.
HMRC figures show there were 42,964 applications for Specified Adult Childcare Credits during the 2023/24 tax year, with around four in five applications approved. However, experts believe many more eligible grandparents could still be missing out.
Backdating and Eligibility
Claims can be backdated to 2011, meaning some people could significantly increase their State Pension entitlement if they qualify.
To be eligible, you must have cared for a child under the age of 12 while you were over 16 but below State Pension age. The child's parent or main carer must have claimed Child Benefit and agree to transfer their National Insurance credits by signing the application.
Childcare Costs Pressure
The research also highlights the growing pressure childcare costs are placing on families. Parents expect to spend an average of £339 per child during the six-week summer holidays, while one in five believe their bill will top £500.
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. If an eligible grandparent is looking after children while the parents are working, it's worth checking whether they could claim the Specified Adult Childcare Credit.
"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."
