State Pension 

Carer grandparents miss out on pension top-up

Carer grandparents miss out on pension top-up

A total of 81,000 eligible grandparents are missing out on the childcare national insurance credit, new data has found.

Guy Opperman, under-secretary of state at the Department for Work &Pensions, has confirmed just 19,000 grandparents have made use of childcare national insurance credit.

This count towards their qualifying years for a full state pension. 

With an estimated 100,000 grandparents eligible, this means less than 20 per cent have claimed.

Rachael Griffin, tax and financial planning expert at Old Mutual Wealth, said: “With childcare costs surging to become disproportionate amount of people’s salary, grandparents often throw families a much-needed lifeline by taking on the care.

“However, the vast majority of this workforce are not seizing what they rightly deserve, as Guy Opperman has confirmed that since 2011 just 19,000 people have taken advantage of the government’s childcare credits.  With estimates suggesting there are around 100,000 grandparents eligible, under 20 per cent have claimed. A worrying figure, given the option has been in place for over seven years.

“While spending your days taking trips to the zoo and having picnics in the park may sound like a holiday, taking care of young children while doing so make it is more akin to working a full-time job. National Insurance credits are the least this unsung workforce deserves.”

Grandparents that care for grandchildren aged less than 12, can qualify for class three national insurance credits known as specified adult childcare credits.

These count towards qualifying years for a full state pension. Those who retired before April 2016, need 30 qualifying working years to get the full state pension.

Those retiring after April 2016, need 35 years.

Gemma Siddle, chartered financial planner at Newton Aycliffe-based Eldon Financial Planning, said:  “As with many benefits, you need to be aware you are eligible in order to make the claim. Understanding your financial position is therefore vital.

"This claim rate is higher than previously so it’s moving in the right direction. Recent government enhancements to their technology should hopefully make the claims process smoother in future too."

aamina.zafar@ft.com