Grandparents who have not yet hit state pension age and who care for their grandchild(ren) to enable the parents to go back to work, could be missing out on £231 per year towards their state pension. That is around £4,600 over a 20-year retirement.
According to the Department for Work and Pensions, only 1,300 people UK wide are taking advantage of this when in fact nearly 100,000 are eligible. This scheme – officially known as the Specified Adult Childcare Credits scheme, but called the Grandparents Credits for ease – was introduced in April 2011, but is still widely unknown, meaning thousands of grandparents are missing out on valuable National Insurance (NI) credits towards their state pensions.
Anyone in receipt of Child Benefit for a child under 12 automatically gets NI credits towards their state pension. So if a parent goes back to work and pays NI, s/he doesn’t need the NI credits s/he is receiving from the Child Benefit as s/he qualifies through work. This Government scheme allows for a parent to sign a form and pass the NI credits to the grandparents or other family member who is actually looking after the child – ensuring none of those precious NI qualifying credits go to waste.
If you’re a grandparent who’s retired early to help look after your grandchildren, further information can be found here and if you would like to discuss this with us, please call for a chat.