Grandparents across Britain are being encouraged to apply for a little-known benefit in order to claim a state pension payment boost of up to £330 but who is eligible for this lump sum?
A record number of grandparents and family members are applying for a government scheme that can add thousands of pounds to their state pension, new Government data has revealed.
Specified adult childcare credits provide a means for grandparents or other family members to boost their state pension by receiving National Insurance (NI) credits when caring for a child under 12.
When the child’s parent or main carer is working and already building up qualifying years through their own NI contributions, the “extra” credits associated with their child benefit claim can be transferred to a relative who provides childcare.
Grandparents could boost state pension payments
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Each year of transferred credit is currently worth £330 in additional state pension income for 2025/26, potentially adding nearly £6,600 over a 20-year retirement. Importantly, there is no minimum number of hours a person needs to provide care to be eligible for the scheme.
The Government introduced the system in 2011 to ensure that those who gave up or reduced work to care for children could still build up state pension entitlement, provided they were below state pension age at the time of care.
Thanks to this scheme, family members caring for children under 12 to receive transferred National Insurance credits from parents who are already building qualifying years through their own contributions
With just a couple of months until the summer holidays, many parents may already be calling on grandparents for help with childcare. While the informal support provided by relatives is often essential, it can also come with financial benefits if families take the time to transfer unused National Insurance credits to eligible carers.
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Britons are worried about their pension savings GETTY To qualify, you must be an eligible family member such as a grandparent, aunt, uncle, or older sibling providing care for a child under 12 whose parent receives child benefit and agrees to the credit transfer. You must also be below state pension age, which is currently 66.
Only one credit is available per child benefit claim, regardless of how many children are being cared for. For example, if you care for two grandchildren in the same household, only one credit can be transferred.
Applications are often rejected for two main reasons: either the applicant already has a qualifying year of National Insurance because they are working or receiving other credits, or they are the recipient of child benefit for that child themselves.
Claims can be backdated to April 6, 2011, and applications for a specific tax year can be submitted from October 31 of the following tax year.
Britons can claim childcare benefits
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Jon Greer, the head of retirement policy at Quilter, said: “Applications for specified adult childcare credits are surging as more families catch on to the fact that looking after grandchildren doesn’t just help with childcare but can also boost your retirement income.”
He added: “Each year of credit is currently worth £330 on your state pension and yet awareness remains far too low.
“Many eligible grandparents could be missing out on thousands of pounds simply because they don’t realise they qualify or how to apply.”
Greer called for Government action, stating: “We would welcome a renewed effort by the government to raise awareness of these credits, particularly among lower-income families and communities where gaps in NI records are more common.”
