News | Legal News

18 January 2017

Thousands missing out on ‘grandparents’ credit’

Grandparents playing a crucial role in childcare are at risk of losing more than £4,500 of their state pension, research finds.

Information obtained under the Freedom of Information Act (FOI), shows people of working age who look after their grandchildren could be missing out on thousands of pounds in National Insurance (NI) contributions by failing to apply for a "grandparents' credit" to top up their pension.

Royal London, who submitted the data request to HM Revenue and Customs (HMRC), says there has been a "massive non take-up" of the scheme, with just 1,298 grandparents and family members benefiting in the year to September 2016.

It is urging the government to do more to highlight the scheme, saying its calculations suggest more than 100,000 grandparents of working age could benefit.

Under the rules - which were introduced in 2011 - a mother returning to work can sign a form that allows a grandparent or family member to receive NI credits for looking after child aged under 12.

Undertaking unpaid childcare could cost a grandparent £231 of their state pension every year, equating to £4,620 over a 20-year retirement.

Former pensions minister Sir Steve Webb, now director of policy at Royal London, said: "Many families rely heavily on the support provided by grandparents to enable them to combine paid work and family life.

"The fact that there is a scheme to make sure that grandparents do not lose out, by protecting their state pension rights, is a very good thing. But the scheme is not much use if hardly anyone takes it up."

Stay in touch

Phone: +44 (0) 1753 889995

Email: enquiries@bpcollins.co.uk

About cookies on our website

Our Site uses cookies to improve your experience of certain areas of the Site and to allow the use of specific functionality, such as social media page sharing. You may delete and block all cookies from this Site, but as a result, parts of the Site may not work as intended.

To find out more about our cookies policy, please visit here.

Click on the button below to accept the use of cookies on this Site (this will prevent the dialogue box from appearing on future visits).