Interactive Investor

Just 1% of grandparents taking advantage of valuable state pension perk

21st May 2019 09:32

Tom Bailey from interactive investor


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Thousands of grandparents who look after their grandchildren are missing out on a national insurance credit, figures from Royal London show.

 Just 10,084 grandparents are currently claiming national insurance credits through a little-known scheme according to a new Freedom of Information request by mutual insurer Royal London.

While this is an increase from the roughly 1,000 doing do in 2015/16, it is still way below the number entitled. 

According to analysis by Steve Webb, Royal London’s director of policy, this is a tiny proportion of those potentially eligible for the benefit.

Mr Webb estimates that there are roughly one million eligible, meaning less than 1% of those who could claim the credits are doing so.

Under rules launched in 2011, grandparents or other family members that provide childcare can claim national insurance credits, boosting their state pension.

So long as the child in question is under the age of 12 and the parent has returned to work, national insurance credits can be transferred to an out-of-work family member looking after the child.

These credits, assuming the intended recipient is still under state pension age, help to increase their state pension entitlement, helping them to build up a full state pension. 

Webb comments: “While 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 would be quite wrong if these grandparents suffered financially in terms of their own state pension as a result.”

You can apply for national insurance credits for taking care of grandchildren using the government gateway website, using form CA9176.

This article first appeared on our sister website Money Observer

This article was originally published in our sister magazine Moneywise, which ceased publication in August 2020.

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