Thousands of grandparents are boosting their State Pension thanks to a little-known benefit linked to childcare - and experts fear many more could be missing out.
With school holidays approaching and grandparents preparing to help look after grandchildren, new figures reveal that more than 159,000 people have successfully claimed valuable pension credits that can increase their State Pension entitlement.
The little-known scheme allows some grandparents and other family members who provide childcare to receive National Insurance credits, helping to fill gaps in their pension record and potentially increase their retirement income.
New data obtained from HM Revenue & Customs shows that 202,037 applications for Specified Adult Childcare Credits have been made since 2016.
Of those, nearly eight in 10 applications were approved, helping thousands of families turn childcare support into a future pension boost.
The figures also show applications have surged in recent years, jumping from just under 30,000 to almost 43,000 in a single year after increased publicity around the scheme.
The hidden pension benefit many grandparents don't know exists
The credits work by transferring National Insurance credits from a parent or main carer receiving Child Benefit to an eligible grandparent or family member who helps care for a child under 12.
For many people, those credits can be incredibly valuable.
Missing National Insurance years can reduce the amount of State Pension someone receives in retirement, meaning every qualifying year counts.
Experts say grandparents who have reduced working hours, retired early or spent time out of work could particularly benefit.
Why the scheme matters more than ever
With childcare costs continuing to soar across the UK, more families are relying on grandparents for regular childcare support.
Research has repeatedly shown grandparents save parents thousands of pounds every year by helping with nursery runs, after-school care and holiday childcare.
Now that support could also deliver a financial reward in later life.
Jon Greer, Head of Retirement Policy at Quilter, said: "For many people, securing the full State Pension is a key foundation of later-life income, and these credits can offer grandparents a relatively simple way to strengthen their entitlement while helping family with childcare.
"As childcare costs continue to rise and families rely more on informal support, ensuring these credits are properly understood and used will only become more important."
Why some applications are rejected
Despite the high success rate, more than 40,000 applications were unsuccessful.
According to Quilter, one common reason is that applicants already have a qualifying National Insurance year through work or other benefits, meaning they cannot gain additional credits.
Experts are calling for greater awareness of the scheme, arguing many grandparents simply do not realise they may be eligible.
Who can claim?
You may qualify if:
- You care for a grandchild or family member under 12
- The child's parent or main carer receives Child Benefit
- The parent does not need the National Insurance credits themselves
- You are below State Pension age
Experts say checking eligibility could prove worthwhile, particularly for grandparents who took time out of work and have gaps in their National Insurance record.
With thousands already receiving a future pension boost, the figures suggest many more families could be overlooking one of the UK's most valuable hidden retirement benefits.
