More than 159,000 grandparents have successfully claimed valuable pension credits that can increase their Department for Work and Pensions (DWP) State Pension entitlement by approximately £350 a year, according to figures from HMRC and the Labour Party government.
The little-known Specified Adult Childcare Credits scheme allows grandparents and other family members who provide childcare for children under 12 to receive National Insurance credits, which can boost their state pension. Since 2016, a total of 202,037 applications for these credits have been made, with nearly eight in ten (79%) approved.
How the scheme works
The scheme enables family members, such as grandparents, who are caring for children under 12 to build up their National Insurance record. Parents currently claiming Child Benefit can transfer the National Insurance credits they build up to the grandparents, if the parents do not need them themselves.
Wealth management firm Quilter analysed the HMRC data, showing that 159,116 claims were approved between 2016 and 2025 out of 202,000 applications. 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."
Eligibility criteria
To qualify for Specified Adult Childcare Credits, you must meet several conditions: 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; and you are below State Pension age.
Greer added: "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."
Detailed explanation from experts
The Low Income Tax Reforms Group explains: "Many people – often grandparents – look after their relative’s children to allow the parents (or carers) to go out and work. This can mean they are not building up entitlement to the state pension. Specified adult childcare credits may be available to ensure state pension entitlement is preserved for these ‘family carers’."
"Where the parents (or carers) receive National Insurance credits as a result of their child benefit claims, but they do not need them because they are paying National Insurance contributions (NICs) through their employment or self-employment they will have spare credits. These can be transferred to a relative who looks after the child to allow the parent (or carer) to work."
"Even if the parent (or carer) has chosen not to receive the child benefit payments, perhaps because of the high income child benefit charge, they will still receive these National Insurance credits as long as they have claimed the child benefit. If the parent (or carer) has not claimed child benefit at all – whether because of the high income child benefit charge or for some other reason – then a claim for child benefit can only be backdated by three months. See GOV.UK for details of how to claim child benefit."
"If transferred, these National Insurance credits are known as specified adult childcare credits. They can count towards the relative’s eligibility for a state pension, provided that the individual wishing to claim the credits did not have a valid election in place to pay reduced National Insurance contributions."
