Grandparents who assist with childcare this summer could see their state pension boosted by up to £6,000. This is according to recent research by wealth management firm Quilter.
The study emphasises the financial advantages of applying for specified adult childcare credits. These credits are granted when parents transfer National Insurance credits, which can then help fill gaps in your National Insurance record.
To be eligible for specified adult childcare credits, you must have been below the state pension age (currently 66) while caring for a child. The child should be under 12 or under 17 if they have a disability.
There's no specific requirement for the number of hours spent looking after the child and claims can be backdated to 2011. So even if you were a caregiver in the past but aren't now, you might still be eligible to claim, reports Lancs Live.
The child's parent needs to be receiving child benefit as they'll be transferring the National Insurance credit that usually comes with it to the grandparent, the Mirror reports. Therefore, the parent should also ensure they're building up their own National Insurance record for retirement so as not to affect their own state pension forecast.
Not only grandparents but also aunts, uncles, or others who regularly look after children may be eligible to make a claim. To qualify for the full new state pension, which stands at £203.85 weekly, most need 35 qualifying years of National Insurance contributions; however, at least 10 years are necessary to receive any amount.
Gaps in your National Insurance record could mean missing out on the full state pension. Claiming specified adult childcare credits can help bridge those gaps.
Financial services company Quilter has highlighted that these credits could bolster an individuals state pension by up to £328 per year. Over an average retirement period, this sum could equate to an additional £6,000 in your pension pot.
Figures released indicate a total of 123,138 successful claims for these credits so far.
Jon Greer, head of retirement policy at Quilter, remarked: "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."
"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."
To make a claim, specified adult childcare credits form CA9176 must be completed on GOV. UK.
Both the person making the claim and the parent transferring the credit will need to sign the form.
