Grandparents can boost their state pension by over £6,000 claiming 'valuable credits' this summer
Grandparents are being reminded to claim 'valuable credits' which can help them boost their state pension entitlement
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Grandparents are being reminded to claim "valuable credits" which can help them boost their state pension entitlement.
These credits could mean someone ends up more than £6,000 better off over the course of a typical retirement.
Specified Adult Childcare Credits (SACCs) are specifically designed to help people below state pension age - which is currently 66 years old - to build up their state pension rights and qualify for the full payment.
SACCs provide a "valuable opportunity" for grandparents or other family members caring for a child under 12, to fill up any gaps in their National Insurance record.
Grandparents are urged to claim these credits as around three-quarters (76 per cent) of applications have been approved in the last eight years, figures have shown.
On average each year 19,616 people apply for the credit with around 15,400 applications proving successful.
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In total, 123,138 people have successfully claimed the credit, a Freedom of Information request submitted to HMRC by wealth management firm Quilter has shown.
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.
These ‘extra’ credits can then be transferred to the child’s caregiver, potentially increasing their state pension by £328 annually. Over the course of a standard retirement, this could increase their state pension by over £6,000.
Jon Greer, head of retirement policy at Quilter said: “It is fantastic to see more grandparents and other family members take advantage of Specified Adult Childcare Credits.
“The numbers of people applying for the credit have been steadily climbing and last year saw the most people apply on record with this year set to top that.
“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.”
Applications may be rejected if, for example, the applicant already has a qualifying year of NI due to current work or if they 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.
This means that if two grandparents provide care for their child’s two children, there is only one credit available.
The Child Benefit recipient must decide who should have the credit.
Claims can be backdated to April 6, 2011. However, the credits can only be transferred if the parent does not need them and agrees to the grandparent’s application.
It should be noted that applications for a specific tax year can only be submitted after October 31 of the following tax year.
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Greer continued: “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.”
The full new state pension is £221.20 a week in the 2024/25 tax year, and the full basic state pension is £169.50 per week.
People need 35 ‘qualifying years’ of National Insurance Contributions (NICs) to qualify for the full amount.
They must have at least 10 years’ to receive any state pension at all.
Who can apply for Specified Adult Childcare credits?
People can apply as long as:
- they are an eligible family member who provided care for a child under 12
- they were over 16 and under State Pension age when you provided care for the child
- they are ordinarily resident in the UK but not the Channel Islands or the Isle of Man
- the child’s parent (or main carer) has claimed Child Benefit but does not need the credits themselves
Who counts as an eligible family member
People are classed as an eligible family member if they are the:
- mother or father who does not live with the child
- grandparent, great-grandparent or great-great-grandparent
- aunt or uncle
- brother or sister