Grandparents who regularly look after their grandchildren could be missing out on up to £7,170 in extra State Pension, with new research suggesting many families have never heard of a little-known HMRC scheme.
Specified Adult Childcare Credits (formerly known as Specialist Adult Childcare Credit) can help eligible grandparents fill gaps in their National Insurance record and increase the amount of State Pension they receive in retirement.
This comes as grandparents continue to play a vital role in helping parents cope with childcare costs during the summer holidays.
Grandparents provide free childcare - but many miss out on pension boost
Figures from Confused.com show that grandparents look after their grandchildren for an average of two days a week, with almost three in 10 (29%) providing childcare for at least three days every week.
Despite this, 62% of grandparents provide that care for free, while many are also missing out on valuable National Insurance credits.
HMRC data shows 42,964 applications for Specified Adult Childcare Credits were made in 2023/24, with around four in five being approved.
That means thousands of eligible grandparents are successfully boosting their future State Pension - but take-up remains relatively low compared with the number who could qualify.
How the scheme works
Specified Adult Childcare Credits allow a working parent or main carer to transfer unused National Insurance credits linked to their Child Benefit claim to a grandparent or another eligible family member who provides childcare.
The credits help fill gaps in a person's National Insurance record, increasing the amount of State Pension they may receive when they reach retirement.
Claims can be backdated to 2011, meaning some grandparents could significantly increase their pension entitlement if they qualify.
You can apply here.
Who can claim?
You may be eligible if:
- You cared for a child under the age of 12.
- You were over 16 but below State Pension age while providing the childcare.
- The child's parent or main carer claimed Child Benefit but does not need the National Insurance credits themselves.
- The parent agrees to transfer the credits and countersigns the application.
Parents should also check they have National Insurance credits available to transfer before applying.
Childcare costs continue to soar
The findings also highlight the growing financial pressure on families.
Parents expect to spend an average of £339 per child on childcare during the six-week summer holidays, while one in five expect costs to exceed £500.
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Tara Evans, Personal Finance Editor at Confused.com, said: "Grandparents are quietly providing an enormous amount of childcare for families across the UK, helping parents stay in work while saving them hundreds or even thousands of pounds in childcare costs each year.
"But our research suggests many families are missing out on a valuable pension benefit simply because they don't know it exists.
"If an eligible grandparent is looking after children while the parents are working, it's worth checking whether they could claim the Specified Adult Childcare Credit.
"The application is relatively straightforward, and for people who have gaps in their National Insurance record, these credits could make a meaningful difference to their State Pension in retirement."
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