Over 100,000 grandparents missing out on valuable grandparents' credit

Over 100,000 grandparents missing out on valuable grandparents' credit

Thousands of grandparents who look after their grandchildren could be missing out on the chance to boost their future State Pension, Royal London has highlighted.

Under current rules, if a mother goes back to work after the birth of a child she can sign a form that allows a grandparent (or other relative) to receive National Insurance credits for looking after the child. A grandparent who gives up work to look after the grandchild would otherwise be losing out on valuable state pension rights.

If a working age grandparent misses out on one year of state pension rights because they are spending time with a grandchild instead of doing paid work, this would cost them 1/35th of the full rate of the state pension or £231 per year.  Over a 20-year retirement this would be a loss of over £4,500.

The Specified Adult Childcare Credit, is so little known that just 1,298 grandparents (and other family members) benefited in the year to September 2016, a smaller number than two years previous when 1,725 were benefiting. But calculations by Royal London suggest that there could easily be over 100,000 grandparents of working age who could benefit if the scheme was more widely known.

Royal London is calling on the Government to make these rights more widely known, particularly to new mothers, so that those who make sacrifices for the sake of their children and grandchildren do not lose out.

Steve Webb, Royal London Director of Policy, said: "Many families rely heavily on the support provided by grandparents to enable them to combine paid work and family life.  The fact that there is a scheme to make sure that grandparents do not lose out, by protecting their state pension rights, is a very good thing. 

"But the scheme is not much use if hardly anyone takes it up.  The Government needs to act quickly to alert mothers to the fact that they can sign over the National Insurance credits that they do not need," he said.

Read the Goverment's Specified Adult Childcare Credits fact sheet

Download a grandparents' credit application form