GRANDPARENTS COULD BOOST STATE PENSION BY £1,514 A YEAR

Family members who look after children under the age of 12 can add £1,514 to their state pension by applying for specified adult childcare credits.

Grandparents who look after their grandchildren for just one hour a week could be left thousands of pounds worse off in retirement after failing to claim a lesser known state pension boo Grandparents could boost state pension by £1,514 a yea st.

Just a small number of people are claiming specified adult childcare credits (SACC) which gives family members, often grandparents, who have looked after children under the age of 12 national insurance (NI) credits that can be used to increase or even enable entitlement to the state pension.

HMRC received more than 21,000 applications last year, according to data obtained by wealth manager St James Place (SJP) following a Freedom of Information (FOI) request, but SJP estimates the number of applications received is less than a ninth of the number of grandparents who could be eligible.

In fact, it said more than 150,000 grandparents could be missing out.

The revelation comes after the state pension saw its biggest ever rise this week, increasing from 10.1 per cent, from £185.15 to £203.85 per week. Despite the hike, it is still not enough to beat inflation which currently sits at 10.4 per cent.

To bump their pension up, grandparents are encouraged to see if they can apply for SACC.

These credits were introduced from April 2011 and you may be entitled to receive them if you are a grandparent, or other family member, who cares for a child under 12.

There’s no minimum number of hours they need to be looking after the child, however, the parent must be registered for child benefit, even if they aren’t actually receiving it.

This is because the child benefit is what entitles the parent to NI credits if they either aren’t working, or are working but earning less than £190 a week.

If the parent starts to earn enough through employment to get a NI credit, the credit they received from their child benefit is available and can be transferred to a family member who’s helping to look after the child.

Previous research by Age UK indicates that 40 per cent of the nation’s grandparents over the age of 50 have provided regular childcare for their grandchildren.

Under new state pension rules, you need at least 10 qualifying years on your NI record to get any state pension. You need 35 qualifying years to get the full new state pension, or a proportion between 10 and 35 qualifying years.

For someone who can boost their credits from 30 to 35 years that could be equivalent to £1,514 per year more than they receive when they retire.

Claire Trott, divisional director for retirement and holistic planning at St. James’s Place, said: “The state pension is the cornerstone for many when planning for retirement, so it is crucial to make sure you have accrued enough NI credits.

“With so many grandparents helping out with childcare it’s important to remember you don’t have to sacrifice your state pension to lend a hand and support your family.”

She said that although it may be tempting for those who are subject to the high income child benefit tax charge to claim NI credits to save hassle, but for those whose parents are helping to take care of their children, it can be a great way to support them in the future.

Trott adds: “If you’re earning national insurance in your own right, you can pass on the credit to a parent if needed. It is a simple process, but the child benefit needs to be claimed, although a tick of a box means no payment will be made and so no tax charge will be incurred.”

“There are also other ways to top up your state pension if you are not eligible for the SACC, such as regular payments or purchasing missing years, which is currently possible back to 2006. The state pension is good value and shouldn’t be dismissed.”