Starting gun fired on new claims for ‘grandparents credits'

Today (1st October) marks the first opportunity for grandparents to claim National Insurance credits for 2021/22 for time spent looking after a grandchild whose parent is out at work. Those who have never claimed at all but have been looking after a child for a long time can claim for earlier years all the way back to the scheme’s introduction in 2011.

Under this scheme (formally known as ‘specified adult childcare credits’) where a parent on child benefit for a child under 12 goes out to work they can sign over the National Insurance credit they get for being on child benefit to another family member who may be looking after the child.

Key points are:

• There is no minimum hours requirement; as long as the parent of the child confirms that care was provided by another family member, the other family member can benefit;
• These are National Insurance credits towards (future) state pension entitlement; they therefore apply only to those who are currently under pension age;
• Each year can add up to 1/35 of the full state pension to the carer’s final pension figure; at current rates this is around £275 per year;
• Signing over the NI credit costs nothing to the parent who is going out to work and making their own NI contributions – this NI credit is ‘going spare’;
• Provided that the parent either claims Child Benefit *or even just claims the NI credits* they can be signed over
• Because it takes time to finalise NI records for 2021/22, HMRC only accept claims for these credits in the October after the end of the financial year;
• More details on how to claim are at: Specified Adult Childcare credits: fact sheet - GOV.UK (www.gov.uk)
• Although the person caring for the child will often be a grandparent, other family members such as aunts and uncles can also apply;
• During lockdown, the Government relaxed the rules so that even where a grandparent kept a child amused over video while a parent worked, this could count towards credits.

In an extreme case, if someone had literally been caring every year since 2011/12, and now put in a claim for all years from 2011/12 until 2021/22, this would be eleven years of credits and could add just over £3,000 per year (11 * £275.08) to their final state pension.

Commenting, Steve Webb, partner at consultants LCP, said:

“Informal childcare by another family member is often what enables a parent to go out to work, especially given the high cost of formal childcare. It is important that grandparents and other family members who provide this care do not damage their own state pension prospects as a result. National Insurance credits help people to protect their state pension while doing valuable work such as looking after a child. Now that applications are open for 2021/22, I would encourage anyone who thinks they might be eligible to put in an application. They should also think about whether they might have been entitled at any point since 2011, as there is currently no deadline for backdated claims”.

According to research by the charity AgeUK, five million grandparents have provided regular childcare for their grandchildren at some point, though the research does not indicate how many of these grandparents were under pension age at the time and potentially eligible for NI credits.

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Note to editors: The AgeUK research can be found at: 5 million grandparents take on childcare responsibilities | Latest news | Age UK