An increasing number of grandparents are claiming national insurance credits to boost their state pensions because they are looking after their grandchildren, but thousands more are missing out on the benefit, according to new research by Royal London.
Under current rules, where a grandparent is looking after a grandchild and this allows the child’s parent to get back to work, the grandparent may be entitled to a national insurance credit to help them build up a full state pension.
However, although there has been a seven-fold rise in the number of people claiming the credit, insurance firm Royal London said only one in 10 of those entitled to claim has done so.
A grandparent who looks after a grandchild for one year could add around £230 per year to the amount of state pension they get in retirement, adding up to a total of more than £4,500 over a typical 20-year retirement, according to Royal London.
Last year, the insurer obtained HMRC figures which showed that just 1,298 grandparents or other family members had claimed this national insurance credit in the year from October 2015 to September 2016.
Publicity around the availability of the credit led to a surge in uptake, with 9,486 applications in the year to September 2017.
Sir Steve Webb, former pensions minister and director of policy at Royal London, said: “It is right and proper that when grandparents sacrifice their own working life to help a family member get back to work, they should not also damage their own state pension prospects.
“This national insurance credit is a valuable right and it is good news that the numbers claiming have risen so dramatically in such a short space of time.
“But we believe that there are tens of thousands more grandparents who could be entitled to benefit and would encourage more of them to find out about the scheme and to make a claim.”
