Just 1% of grandparents are taking advantage of this state pension perk

Thousands of grandparents who look after their grandchildren are missing out on a national insurance credit.

Thousands of grandparents who look after their grandchildren are missing out on a national insurance credit, figures from Royal London show.

Under rules launched in 2011, grandparents or other family members that provide childcare can claim national insurance credits, boosting their state pension.

So long as the child in question is under the age of 12 and the parent has returned to work, national insurance credits can be transferred to an out-of-work family member looking after the child.

These credits, assuming the intended recipient is still under state pension age, help to increase their state pension entitlement, helping them to build up a full state pension. 

However, according to analysis by Steve Webb, Royal London’s director of policy, only a tiny proportion of those potentially eligible for the benefit are taking advantage of it.

According to a new Freedom of Information request by Royal London, just 10,084 are currently claiming national insurance credits through the scheme.

While this is an increase from the roughly 1,000 doing do in 2015/16, it is still way below the number entitled. Webb estimates that there are roughly one million eligible, meaning less than 1% of those who could claim the credits are doing so.

Webb comments: “While it is great news that thousands more grandparents are now benefiting from this scheme, the numbers are still a drop in the ocean out of all those who could benefit.

“It would be quite wrong if these grandparents suffered financially in terms of their own state pension as a result.”

Subscribe to Money Observer Magazine

Be the first to receive expert investment news and analysis of shares, funds, regions and strategies we expect to deliver top returns, plus free access to the digital issues on your desktop or via the Money Observer App.

Subscribe now

Add new comment