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."