The little-known credit that could boost grandparents state pension
Many grandparents are preparing to take on extra childcare responsibilities over the summer holidays
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Your support makes all the difference.A little-known pension credit for grandparents could add thousands.
More than 150,000 applications have been made over the past eight years for valuable credits that can help boost the amount of state pension someone receives, according to HM Revenue and Customs (HMRC) figures.
The figures, obtained by wealth manager and financial adviser Quilter, were released as many grandparents prepare to take on extra childcare responsibilities, giving parents a helping hand over the summer holidays.
Specified adult childcare credits (SACCs) provide a valuable opportunity for grandparents or other family members caring for a child to boost their own pension.
The credits are designed to help people below state pension age to build up their state pension rights.
The credits work by transferring the national insurance (NI) credit that a parent or carer receives, as a child benefit recipient, to an eligible family member. They can help to plug gaps in people’s NI records.
People may be able to receive them if they are an eligible family member who has provided care for a child aged under 12 and if the child’s parent or main carer does not need the credits themselves.
A Freedom of information (FOI) request submitted by Quilter to HMRC found that, between October 2023 and April this year, around three-quarters (76%) of applications were approved.
People may have an application rejected if, for example they already have a qualifying year of NI, perhaps because they work or receive other NI credits.
Another potential reason why credits may not be awarded is if no-one has claimed child benefit for the child, therefore there is no NI credit to transfer.
Additionally, there is only one credit available per child benefit claim, regardless of the number of children. So, if two grandparents provide care for their child’s two children, there is only one credit available – and the child benefit recipient must decide who should have the credit.
Recipients also need to have been aged under the state pension age when the care was provided and the child’s parent or main carer needs to agree to the application.
In total, from the information provided to it by HMRC, Quilter counted 156,933 applications which had been made, 123,138 which were approved and 33,795 which were rejected, between October 2016 and April 2024.
Jon Greer, head of retirement policy at Quilter said: “These credits are not only crucial for securing the full state pension if you have gaps in your national insurance record, but they are also a cost-effective method of doing so, versus paying to fill in missed years.
“It’s worth knowing too that the number of hours a grandparent helps out with childcare is irrelevant to the claim. Even if it’s just one day a week, eligible grandparents should be able to claim.
“More needs to be done to highlight that these credits are available and to educate people on how to correctly apply so they avoid rejection.
“If not, this unsung workforce of child carers will fail to benefit despite playing a critical role in keeping the economy going especially over the summer months when working parents struggle with the rising costs of childcare and grandparents step in to save the day.”