One in 10 grandparents makes a claim for ‘granny daycare’ – ensure you don’t miss out

The number of grandparents claiming a national insurance (NI) credit towards their state pension because they are caring for their grandchildren has gone up sevenfold, according to data obtained by Royal London under the Freedom of Information Act (FOI).

Insurer Royal London obtained HMRC figures which show that only 1,298 grandparents (or other family members) had claimed an NI credit in the year from October 2015 to September 2016. But after the poor take-up of the credit was publicised, there has been growing interest in the scheme and a new FOI reply shows that there were 9,486 applications in the year to September 2017 – a sevenfold increase.

• Part-time carer? Ensure you earn state pension entitlement by getting the national insurance credits you’re due
   

However, Royal London estimates that this still represents only around one in 10 of those who may be entitled and it is urging more grandparents to make a claim.

When a grandparent looks after a grandchild so that the child’s parent can return to work, they may be entitled to an NI credit to help them build up a full state pension. The person receiving child benefit for the child (usually the mother) signs over the NI credit that they receive to the grandparent. As the parent is back at work, they no longer need the credit as they will be paying their own NI contributions.

Royal London suggests that a grandparent who looks after a grandchild for one year could add around £230 a year to the amount of state pension they get in retirement. 

Steve Webb, director of policy at Royal London, says: “It is right and proper that when grandparents sacrifice their own working life to help a family member get back to work, they should not also damage their own state pension prospects. 

“This NI credit is a valuable right, and it is good news that the numbers claiming have risen so dramatically in such a short space of time. But we believe that there are tens of thousands more grandparents who could be entitled to benefit and would encourage more of them to find out about the scheme and to make a claim.”