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Grandparents could be missing out on extra state pension

People are failing to claim National Insurance credits

Grandparents and NI credits

Grandparents looking after children may be missing out on National Insurance credits

Thousands of grandparents are missing out on National Insurance (NI) credits that could be worth around £230 a year, according to research from Royal London. 

Grandparents could be losing out

Any parents who stop work to look after their children are given NI credits to help them build up a state pension.

If they return to work, relatives who then look after the kids, usually grandparents, can claim the National Insurance credits instead, as long as they are of working age while caring for the child or children in question.

Relatives caring for a child under 12 will get an extra £231 of annual pension (1/35th of the state pension) for each year they give up. This would equate to around £4,600 over a 20-year retirement.

It’s estimated that around 100,000 grandparents could benefit from this scheme, but a Freedom of Information request submitted by Royal London has revealed that only 1,298 people took advantage in the year to September 2016. 

Sir 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.’

Find out more: pensions & retirement hub – learn more about your retirement options  

Why are NI credits important?

NI credits are important as they count towards how much state pension you’ll receive. If you retired or will retire after April 2016, you’ll need 35 qualifying years to get the full state pension.

If you’re looking after grandchildren and you haven’t reached 35 qualifying years, you can get claim additional NI credits for the childcare you are providing. 

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.

How to make a claim

The specific credit you’ll need to get is called the Specified Adult Childcare credit, which is publicised on Gov.uk and promoted through a number of consumer websites, according to the Department for Work and Pensions.

To receive the extra state pension, the grandparent or parent who’s transferring their NI credits must complete form CA9176 and send it off to HMRC.

If people think they’ve missed out on extra state pension, they can make backdated claims for all the years back to 2011.

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