State Pension  

Grandparents miss out on £5k pension boost

Grandparents miss out on £5k pension boost

Millions of grandparents looking after their grandchildren could be missing out on valuable national insurance credits, research has shown.

Figures given to insurer Royal London in a Freedom of Information request showed that in 2017/18 10,084 grandparents and other family members received help with their state pension through national insurance credits by looking after family members under the age of 12.

This number has increased by 677 per cent on the 1,298 grandparents and other family members benefiting from national insurance credits in 2015/16 but more still needs to be done to make people aware of this benefit, the insurer stated.

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Under the specified adult childcare credits scheme, launched in 2011, a family member who is looking after a child under the age of 12 while the child’s parents are out at work can benefit from a national insurance credit.  

The parent who has returned to work will be paying national insurance and so no longer needs the national insurance credit that comes with child benefit.  

Therefore the parent can sign this over to the family member who is looking after their child and these credits can then help grandparents fill gaps in their national insurance record, to make sure they qualify for certain benefits including the full state pension.

Steve Webb, director of policy at Royal London, said: "Whilst it is great news that thousands more grandparents are now benefiting from this scheme, the numbers are still a drop in the ocean out of all those who could benefit.  

"It is increasingly common for grandparents to spend some time each week looking after their grandchildren, often to enable a parent to go out to work.  

"It would be quite wrong if these grandparents suffered financially in terms of their own state pension as a result. This scheme needs to be much better publicised and I would encourage any family with a grandparent under pension age who helps out with childcare to find out more."

According to Royal London, one year of credits can be worth £250, or £5,000 over a 20-year retirement.

A report by charity Grandparents Plus in 2011 found that there were seven million grandparents with children aged under 16, with half of these aged under 65 therefore entitled to national insurance credits.

In September 2018, Treasury committee chairwoman Nicky Morgan wrote to Esther McVey, then secretary of state for Work and Pensions, saying that the DWP needed to do more to inform parents with low or no income that they can protect their future state pension entitlement by transferring national insurance credits from a partner who claims child benefit.

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