HOW IT CAN HELP YOU BOOST YOUR STATE PENSION

Around one in five grandparents over the age of 50 in the UK provide childcare help for their grandchildren, but thousands may be missing out on a valuable scheme that could increase their State Pension entitlement [1]. Soaring childcare costs mean many parents turn to grandparents to look after their children when they return to work.

This helps them and has important financial benefits for grandparents, even if they aren’t paid for the childcare they provide. Grandparents who care for grandchildren may be able to claim National Insurance (NI) credits to potentially increase their State Pension by thousands of pounds over the course of retirement.

The charity Age UK has highlighted around five million people currently provide regular care for their grandchildren. According to the latest figures from HM Revenue & Customs revealed by a Freedom of Information request, around 21,000 people applied for Specified Adult Childcare credits last year, and 17,000 qualified.

HOW TO APPLY FOR SPECIFIED ADULT CHILDCARE CREDITS

The process of claiming these credits involves transferring them from the child’s parent to the grandparent providing the care. This can ensure that grandparents do not miss out on valuable State Pension entitlements.

It’s essential for grandparents to be aware of this opportunity and to take the necessary steps to apply for these credits. The application process is straightforward but requires understanding the specific eligibility criteria and documentation needed.

POTENTIAL IMPACT ON RETIREMENT INCOME

By claiming these NI credits, grandparents can see a significant boost in their State Pension over time, which can provide greater financial security in retirement. The increase in pension can make a substantial difference, especially given the rising cost of living and other financial pressures retirees face.

Understanding the long-term benefits and taking action to claim these credits can ensure that grandparents are adequately compensated for the vital support they provide to their families.

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Source data:

[1] Age UK 08/05/24.

THIS ARTICLE DOES NOT CONSTITUTE TAX, LEGAL OR FINANCIAL ADVICE AND SHOULD NOT BE RELIED UPON AS SUCH. TAX TREATMENT DEPENDS ON THE INDIVIDUAL CIRCUMSTANCES OF EACH CLIENT AND MAY BE SUBJECT TO CHANGE IN THE FUTURE. FOR GUIDANCE, SEEK PROFESSIONAL ADVICE.