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Could you be entitled to an extra £5000 in state pension for looking after your grandchild?

Updated: Jan 12, 2020

As the summer holiday draws to a close and parents return to work, many grandparents volunteer to look after their grandchildren in order to spend more quality time together. Thanks to the government’s Specified Adult Childcare Credits, which was introduced in April 2011, grandparents looking after their grandchildren or young relatives are eligible to earn National Insurance credit attached to the child benefit from the child benefit recipient directly towards their state pension.


In order to be eligible for this scheme you have to be:


• Caring for your grandchild/relative who is under the age of 12

• Ordinarily resident in the United Kingdom

• Over 16 and under state pension age when you cared for the child

• The child’s parent (or main carer) agrees to your application by countersigning the form to confirm that:


o You cared for their child in the period stated

o You have the Class 3 National Insurance for the period stated.


A year’s worth of credit is roughly £250, so over a typical 20-year pension scheme you could accumulate an extra £5000 in state pension by spending time caring for your grandchild or relative. Payments for this scheme can be backdated as far as 2011!


Only around 10,000 grandparents actually claim Specified Adults Childcare Credit with many grandparents not knowing that they are actually eligible for the scheme. Steve Webb from Royal London stated, “I would encourage any family with a grandparent under pension age who helps out with the childcare to find out more” in a plea to raise awareness about the scheme.


In order to find out more, you can visit www.gov.uk and search ‘Specified Adults Childcare Credit’ - the application form and all information about the scheme can be found there as well.


Kind regards,


William

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