Grandparents, are you missing out on extra pension income?

A new survey from the Royal London shows many grandparents may be missing out on extra money in retirement because they are not claiming National Insurance pension credits for looking after their grandchildren.

Older woman granny playing with child depicting granny au pair


It’s the summer holidays and many grandparents will be helping out with childcare, but a large number may not know that they can get extra money on their pension through National Insurance credits for doing so.

A survey of 4,000 adults by Royal London found almost two-thirds (59%) of over 50s in the UK don’t know Class 3 Specified Adult National Insurance credits can be claimed as a carer or grandparent. Moreover, only one in 10 (9%) adults over 50 years of age have tried to claim NI credits.

Any grandparent under state pension age who looks after their grandchildren on a regular basis can apply for the credits which will help them qualify for a full state pension. To qualify for a full state pension people need 35 years of NI credits. The survey found a third of adults didn’t know of this requirement. The Royal London says a year’s NI contributions are worth approximately £6,382 during retirement.

Claiming credits involves working parents who earn enough to pay National Insurance transferring their Child Benefit credits to grandparents. This does not impact on the finances of the parents as only those who are not working or are on very low incomes and therefore do not pay NI need the credits, but grandparents and parents must apply for them to be transferred*.

Gender pension gap

Although an incomplete NI record affects both women and men, the Royal London says women are more likely to miss out on the credits as more of them will have stopped work because they are caring for children, elderly relatives or for health reasons and have gaps in their employment history.

Royal London says at least 10 years’ worth of NI credits are needed to qualify for the state pension, with 35 years’ worth of credit needed to get it in full. However, many women approaching retirement have less than the necessary number of qualifying years, contributing to a gender pension gap. Royal London’s research reveals a third (33%) of adults aged between 50 – 69 have found gaps in their NI record.

Adult childcare credits can be backdated to 6th April 2011 and the Government encourages everyone who is eligible to apply. If you miss a year of NI contributions and don’t make it up, you will lose 1/35th of the full rate state pension. That’s equivalent to £5.82 a week or £304 a year.

Clare Moffat, pensions expert at Royal London, said: “Many grandparents find looking after the grandchildren hugely rewarding. Not only does regular care help keep them mentally and physically active, it can also boost their retirement income, but only if they claim the credit that goes towards their state pension.

“The cost of living crisis and phenomenal rise in childcare costs has meant grandparents have increasingly been called upon, but there is a lack of awareness of the ability to benefit financially in terms of their own state pension – extremely useful for anyone with gaps in their record.

“For most people, the state pension provides the foundation for their retirement income and it can make a big difference if you have gaps. So, it’s really important to check your record and claim what you’re entitled to.”

*To apply for the credits, you will need to fill in form CF411A.

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