How grandparents can get little-known state pension boost this summer

Many grandparents could be unaware of a pension credit bonus that could add thousands to their state pensions over the summer.

It comes as HM Revenue and Customs (HMRC) figures that revealed more than 150,000 applications in the last eight years have seen the key credits given to boost a person's state pension.

The figures, found by Quilter, shared that grandparents taking on extra childcare could be entitled to the extra credit this summer.

According to the Independent, the adult childcare credits allow grandparents or fellow childcare givers in the family to get a boost on their own pension.

The credits were created to give people below the state pension age the chance to build up their own state pension rights.

How grandparents can boost their state pension this summer with credits

You can get the extra credit boost by transferring the national insurance (NI) credit that a parent or a carer receives from child benefits to a family member who is eligible.

Recipients can claim the credits if they are a family member who provides care for a child aged under 12 and only if the child’s parent or main carer does not already need the credits themselves.

Quilter shared that through a freedom of information (FOI) request to HMRC, they were able to find that from October 2023 to April 2024 76% of all applicants were approved.

However, you may be rejected if they already have a qualifying year of NI according to the Independent.

You may also not be able to claim the credit boost if no one in the family claims child benefit for the child, meaning there is no NI credit available to transfer.

If you take care of more than one child, you will not be able to claim credit per child as the state pension boost only allows one credit per child benefit claim.

That means if two grandparents take care of two grandchildren, there is only one credit available and the person receiving the child benefit must choose who can have the credit.

You must also be under that state pension age when the care was provided and the child’s parent or main caregiver must agree to the application.

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Discussing the credit, Jon Greer, head of retirement policy at Quilter told the Independent: “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.”