State Pensioners with families could get £6,000 boost with one check
State Pensioners with families could increase their pension pot by up to £6,000 by performing one simple check. Those who care for their grandchildren while the parents are at work can claim a financial reward from the government, which can enhance the amount they receive in their State Pension.
If you care for a child aged 12 and under, you may be eligible to claim Specified Adult Childcare Credits. These credits operate by transferring the weekly National Insurance credit a parent or carer receives to an eligible family member, such as retired grandparents.
The credits can help prevent gaps in your National Insurance record, with credits awarded for each week or part week you provided care for a child. National Insurance credits are crucial as you need at least 10 years' worth to qualify for the State Pension, and 35 years' worth to receive the full amount.
The full rate of the new State Pension is currently £221.20 per week, but the amount you get may vary depending on the number of National Insurance qualifying years you have, if you were contracted out before 2016, or if you paid into the Additional State Pension before 2016. Each qualifying year after April 6, 2016 added to your National Insurance record increases your State Pension amount up to the full rate of £221.20 per week.
According to wealth management company Quilter, these credits could boost some people's State Pensions by around £6,000 over the course of a typical retirement, which is about 20 years.
Jon Greer, head of retirement policy at Quilter says: “It is fantastic to see more grandparents and other family members take advantage of Specified Adult Childcare Credits. The numbers of people applying for the credit have been steadily climbing and last year saw the most people apply on record with this year set to top that.
“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. If not, this unsung workforce of child carers will fail to benefit despite playing a critical role in keeping the economy going especially over the summer months when working parents struggle with the rising costs of childcare and grandparents step in to save the day. “
You can apply for the credits if you meet the following criteria: you are an eligible family member who provided care for a child aged under 12; you were aged 16 years and over, but under State Pension age, when you cared for the child; you are ordinarily resident in the UK, excluding the Channel Islands or the Isle of Man; the child's parent or main carer has claimed Child Benefit, but does not require the credits themselves; the child's parent or main carer agrees to your application. The child's parent or main carer must then countersign the form to confirm they agree that, for the period stated, you provided care for their child and can have the credits.
You must wait until October 31 after the end of the tax year you want to apply for. This is because the government needs to check if the parent or main carer already has a qualifying year for National Insurance purposes.
Applications can be made online via GOV. UK.