Nearly 160,000 grandparents boost state pension via childcare credits over the decade
Key Points
- Nearly 160,000 grandparents have boosted their state pension through childcare credits since 2016/17
- Over 200,000 applications made; 159,116 approved, adding £55m+ a year to retirement incomes
- Each qualifying year adds around £350 a year, worth £7,000+ over a typical retirement
- Around one in five claims rejected; over 9,000 turned down in 2023/24
- Credits transfer from a Child Benefit-claiming parent to a relative caring for a child under 12
Nearly 160,000 grandparents and family carers have boosted their state pension over almost a decade by claiming National Insurance credits in return for looking after children.
Figures compiled by wealth manager Quilter show that more than 200,000 applications have been made for Specified Adult Childcare Credits since 2016/17, with 159,116 of them approved.
A successful claim awards an additional qualifying year of National Insurance and can lift a recipient’s state pension by around £350 a year, equivalent to more than £7,000 across a typical retirement. Collectively, the approved claims add well over £55 million to retirement incomes each year.
The credits are available to grandparents and other relatives who care for a child under 12. Where a parent or primary carer claims Child Benefit but does not need the associated National Insurance credit because they are already building a qualifying year through work, that credit can be transferred to the family member providing childcare, filling gaps in their record.
Maintaining a Child Benefit claim is central to the arrangement, as opting out entirely leaves no credit available to pass on.
Uptake has climbed steadily across the period, with a sharper rise in recent years. Applications jumped to 42,964 in 2023/24, up from 29,967 the year before, a step HMRC attributed to greater awareness following media coverage of the scheme. The previous decade had seen application volumes hover between 13,000 and 21,000 a year before the recent surge.
Despite the growth, the data shows that a consistent share of claims is turned down, with around one in five rejected in recent years.
More than 9,000 applications were unsuccessful in 2023/24 alone. Common reasons for rejection include applicants already holding a qualifying year of National Insurance, often because they remain in work or receive other credits, or because they are already claiming Child Benefit themselves and so benefit from the credits automatically.
Claimants must be under State Pension age and caring for a child under 12 whose parent claims Child Benefit and agrees to transfer the credits.
There is no minimum number of hours required, and claims can be backdated to 6 April 2011. Applications for a given tax year can only be submitted after 31 October of the following tax year.
The credits can prove particularly valuable in addressing gaps in National Insurance records that arise from time spent out of the workforce, which disproportionately affects women.
Jon Greer, Head of Retirement policy at Quilter, said the longer-term trend showed more families becoming aware of the credits, with the recent step-up underlining how responsive people are once the option is better understood.
He said the credits could make a meaningful difference for grandparents who had taken time out of work to support childcare, particularly when set against the cost of filling gaps through voluntary contributions, which can exceed £900 for a single year.
Greer added that securing the full state pension was a key foundation of later-life income and that the credits offered grandparents a relatively simple way to strengthen their entitlement while helping family.
He said the number of unsuccessful applications pointed to a need for clearer guidance on eligibility, and that the role of grandparents in supporting working families would grow as childcare costs continued to rise.
