Grandparents looking after grandchildren could claim state pension boost | Personal Finance | Finance
Grandparents who care for children while their mums and dads are at work may be able to claim a little-known state pension boost. Retirees who provided childcare for their grandchildren before reaching state pension age can qualify for “specified adult childcare credits” to top up their allowance.
The amount of state pension someone receives is based on their National Insurance (NI) record, which itself is made up of “qualifying years” of employment. Those who don’t earn enough NI credits to qualify for the full state pension can tot up individual NI credits manually, sometimes boosting pension allowances by thousands of pounds.
The childcare boost sees the NI credits that would otherwise have gone to an off-work parent divert to the family member carer instead – with claims backdated to 2011. NI credits can also be bought from HMRC to fill in employment gaps.
The lucrative tip was shared by MoneySavingExpert.com, with grateful readers reporting their stories of receiving substantial state pension boosts as a result.
One person named Mick said: “This describes our circumstances perfectly. My wife retired five years early to help with our young grandchildren.
“She was four years short of the full state pension. We will now save £3,000 from not having to buy the missing years.”
Another reader named Andy added: “Following your advice, I claimed NI credits as a grandparent for looking after our grandchildren after I’d retired from work.
“The application was easy and although it took around 25 weeks to process, I was given four years’ worth of NI credits, and my new state pension will rise from around £173/week to £221/week, giving an additional £2,496 a year.”
Eligibility is limited to childcare provided before the claimant reaches state pension age, and only applies to children under 12 years old.
The child’s parent must also be registered for child benefit, even if they’re not receiving it, according to MoneySavingExpert.
“That’s crucial, because the child benefit is what entitles the parent to NI credits if they either aren’t working, or are working but earning less than £129 a week,” a blog post read.
“If that parent then starts to earn enough through employment to get an NI credit, the credit they received from their child benefit is up for grabs and can be transferred to a family member who’s helping to look after the child.”
