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Little-known way grandparents could boost their State Pension by £6,000 this half term – it’s so easy
If you regularly provide childcare you could boost your income
GRANDPARENTS could boost their State Pension by up to £6,000 by taking advantage of a little-known government benefit.
Grandparents who look after their grandchildren while parents are working can claim a financial reward for doing so which could bump up the amount they get in State Pension.
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With legions of grandparents across the country stepping up to provide childcare this half term, now is a great time to check whether you could be entitled to the extra help.
Some 27% of pre-school children are regularly cared for by grandparents as parents struggle with childcare costs, according to government research.
If you're one of those taking care of little ones you could claim "specified adult childcare credits", which count as a National Insurance (NI) credit for those who don't otherwise work, such as retired grandparents.
It is important to be aware of these credits, because you need at least 10 years' worth to qualify for the State Pension and 35 years' worth to get the full amount.
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The full State Pension is worth £221.20 a week this tax year.
Each qualifying year on your NI record after April 2016 could add up to an extra £6.32 a week through your State Pension.
So, even if you're only entitled to a small number of credits, they could significantly increase your income over time.
And, wealth management company Quilter has said these credits could make some people more than £6,000 better off over the course of a typical retirement, which is around 20 years.
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You can even backdate your claim as far as 2011.
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Who is eligible?
Specified adult childcare credits can be awarded to family members who care for a child under 12 while its parents or guardians are working.
The family member must be over the age of 16 and under the state pension age at the time they cared for the child.
Claimants also need to be living in the UK.
To claim specified adult childcare credits, a parent or guardian of the child you care for must claim Child Benefit and they must countersign your application.
When you claim, the NI credits are transferred from the parent or carer who claims Child Benefit to the family member providing childcare.
This does not mean the parent or guardian will be worse off as if they are in work they are likely to be earning credits separately themselves.
If they're unsure, they can check by looking at their National Insurance record online.
If the parents or guardians do not claim Child Benefit, there are no credits to be transferred and a claim can not be made.
You can claim Child Benefit by visiting gov.uk/child-benefit/how-to-claim.
How to apply
To apply for specified adult childcare credits you'll need to complete form CA9176, which you can find on the Gov.uk website.
You'll need to provide your personal details, details of the child you look after, the number of hours of childcare you provide and details of the child's parent or guardian.
Both you and the parent or guardian must co-sign the application.
Applications can be made from 31 October following a particular tax year. So applications for the tax year 2023-24 can be made from Thursday 31 October.
How much can you claim?
How much you'll get in extra credits depends on how long you've been looking after your grandchildren.
Each yearly credit is worth 1/35 of the value of the state pension.
In 2023/24, 1/35 of the £203.85 a week state pension was £5.82 – close to £303 a year.
This works out at around £6,000 over a a 20-year retirement.
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To roughly calculate how much you'll get, multiply the number of years you have been caring for a child by £300.
What help is available to parents for childcare costs?
CHILDCARE can be a costly business. Here is how you can get help.
- 30 hours of free childcare - Parents of three and four-year-olds can apply for 30 hours of free childcare a week.
To qualify you must work at least 16 hours a week at the national living or minimum wage and earn less than £100,000 a year. - Tax credits - For children under 20, some families can get help with childcare costs.
- Tax-free childcare - Available to working families and the self-employed, for every £8 you put in the government will add an extra £2.
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