Grandparents can get £6,600 pension boost for looking after kids during summer holidays – but thousands miss out
Many grandparents are unaware they can be financially compensated for the time spent looking after their grandchildren.
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It comes as 53% of grandparents with grandchildren aged under 18 will step in to look after them this summer, according to research by MyVoucherCodes.
And they are expected to pay more than £21 per day on each child on average, according to the survey.
This was up from £15.80 per day when the website commissioned a similar survey in 2024.
Sarah-Jane Outten, consumer and shopping expert at MyVoucherCodes, said: 'It's clear to see that many parents across the UK are calling on grandparents to step in to help with childcare, but for some, the generosity is coming at a cost."
But there is a way for grandparents to get extra support.
Specified adult childcare credits are a type of National Insurance (NI) credit that can help you qualify for the full state pension.
You need 35 years' worth of NI contributions to get the full amount worth £230.25 a week.
It means parents and other relatives looking after a child under 12 can give their pension a boost.
Recent research obtained by wealth manager Quilter from HMRC found only 104,433 people have successfully claimed the credits in the past five years.
Just 42,962 people applied for the credits last year, even though 78% of applications are successful.
Cash for Care
Every year of transferred credit will boost your state pension by £330 a year.
This could add nearly £6,600 to the value of your state pension over the course of a 20-year retirement.
You can also backdate your claim to 2011, when the credits were first introduced.
Who is eligible?
You can claim if you are an eligible family member and responsible for caring for a child whose parents claim child benefit; otherwise, there are no national insurance credits to transfer.
Moreover, there is only one credit available per child benefit claim, regardless of the number of children.
So even if you care for two of your grandchildren, only one credit can be transferred to you.
It is also important to note that the credits are available for transfer only if you are under the state pension age.
The child you are caring for must also be under 12 years old, or 17 if they have disabilities.
To claim, you must live in England, Scotland, Wales and Northern Ireland, but not the Channel Islands or the Isle of Man.
How do I claim?
You need to wait until October 31 to apply for the current tax year.
This is because HMRC needs to check that the parent or main carer already has a qualifying year of National Insurance.
They should check their National Insurance record to make sure they have credits they can transfer.
Parents and carers can check their National Insurance record on the gov.uk website.
Before you apply for the credits you will need the child's details and a record of the periods when you provided care for them.
You will also need the contact details of the child's parent or main carer who receives the child benefit.
Both you and the person who receives the child benefit must sign a declaration on the application form.
You then need to complete the CA9176 form online.
What are the different types of pensions?
WE round-up the main types of pension and how they differ:
Personal pension or self-invested personal pension (SIPP) - This is probably the most flexible type of pension as you can choose your own provider and how much you invest.
Workplace pension - The Government has made it compulsory for employers to automatically enrol you in your workplace pension unless you opt out.
These so-called defined contribution (DC) pensions are usually chosen by your employer and you won't be able to change it. Minimum contributions are 8%, with employees paying 5% (1% in tax relief) and employers contributing 3%.
Final salary pension - This is also a workplace pension but here, what you get in retirement is decided based on your salary, and you'll be paid a set amount each year upon retiring. It's often referred to as a gold-plated pension or a defined benefit (DB) pension. But they're not typically offered by employers anymore.
New state pension - This is what the state pays to those who reach state pension age after April 6 2016. The maximum payout is £203.85 a week and you'll need 35 years of National Insurance contributions to get this. You also need at least ten years' worth to qualify for anything at all.
Basic state pension - If you reach the state pension age on or before April 2016, you'll get the basic state pension. The full amount is £156.20 per week and you'll need 30 years of National Insurance contributions to get this. If you have the basic state pension you may also get a top-up from what's known as the additional or second state pension. Those who have built up National Insurance contributions under both the basic and new state pensions will get a combination of both schemes.
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