Childcare costs are high, with the average full-time nursery fee for a child under two being £302.10 per week, over £15,700 annually. Many grandparents are stepping in to help, with 27% of pre-school children receiving informal care from family in 2022.
If you are a grandparent providing childcare and helping save your family money, you can also boost your State Pension through Specified Adult Childcare credits.
What Are Specified Adult Childcare Credits?
They are a type of National Insurance (NI) credit, awarded to grandparents or other family members who care for a child under 12 while their main parent or guardian is working.
As an NI credit, Specific Adult Childcare credits count towards your State Pension entitlement. You need at least 10 years’ worth of National Insurance contributions (NICs) to qualify for any State Pension, and at least 35 years’ to get the full new State Pension. This is currently £221.20 per week (2024/25 tax year).
If you are not currently eligible for any or all of the State Pension amount, adding Specified Adult Childcare credits could help you qualify and boost your State Pension.
How It Works:
The NI credits are transferred from the parent who claims Child Benefit, to the grandparent or family member providing care. Each credit then counts towards your State Pension.
For example,
- You provide regular childcare for your grandson, Jack.
- Jack’s mother, Sarah (your daughter), currently claims Child Benefit for Jack which means she receives the NI credits attached to the Child Benefit.
- She can choose to transfer these NI credits to you, as Specified Adult Childcare credits.
- You’ll receive Class 3 NI credits, which count towards your State Pension.
Eligibility:
- You must be a grandparent or family member caring for a child under 12.
- You must be under State Pension age.
- You must be a UK resident.
- The child’s parent (or guardian) must be eligible for Child Benefit and have a qualifying year of NI (a full year where they have been credited with enough NICs to count towards a Basic State Pension).
How Much Could I Get?
Each qualifying year could add up to £6.32 per week to your State Pension. While small individually, this is £328.64 a year and these credits can really add up, especially if you care for the child for multiple years. Its important to remember the State Pension is for life and inflation linked (increases annually).
How to Apply:
Complete an application form on the Government Website: CA9176.
Applications can be made after 31 October following the tax year you provided care (e.g., for the 2024/2025 tax year, apply in October 2025).
Backdating claims:
You can backdate claims as far as 6th April 2011.
Remember:
Any parent/guardian receiving child benefit receives NI credits. If the parent or guardian agrees to transfer these credits to the child’s grandparent as Specified Adult Childcare credits, they’ll miss out on these NI credits. This should not be an issue if they are working and paying sufficient NI towards their own State Pension. However, you should make sure the parent/guardian of the child doesn’t need these NI credits for themselves, before agreeing to transfer them to you.
