Grandparents miss out on pensions credits

Just 10,084 grandparents are currently claiming national insurance credits through a little-known scheme according to a new Freedom of Information request by mutual insurer Royal London.

While this is an increase from the roughly 1,000 doing do in 2015/16, it is still way below the number entitled. According to analysts this is a tiny proportion of those potentially eligible for the benefit. Analysts estimate that there are roughly one million eligible, meaning less than 1% of those who could claim the credits are doing so. Under rules launched in 2011, grandparents or other family members that provide childcare can claim national insurance credits, boosting their state pension. So long as the child in question is under the age of 12 and the parent has returned to work, national insurance credits can be transferred to an out-of-work family member looking after the child.

These credits, assuming the intended recipient is still under state pension age, help to increase their state pension entitlement, helping them to build up a full state pension. The additional national insurance credits can be of considerable value to someone who would not otherwise build up a full state pension. Each annual credit missed could cost someone 1/35 of the value of the state pension — around £250 a year or £5,000 over the course of a typical 20-year retirement.

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