Around 85,000 grandparents and family members could be missing out on the national insurance credit that boosts their state pension.
In a freedom of information request, Royal London found that 15,000 family members claimed the credit in the between October 2018 and September 2019.
While this was a significant increase on the previous year, when 10,000 applicants were approved, it only represents around 3 in 20 of those who could be entitled to help, according to Royal London’s estimates.
This comes after minister for pensions and financial inclusion, Guy Opperman, confirmed that around 100,000 grandparents of working age were eligible in 2018.
The scheme, known as the specified adult childcare credit, is available to family members who are under state pension age and are looking after a child under the age of 12 while the parent goes back to work.
It allows the parent to sign over the national insurance credit they receive as part of child benefit to the family member who is caring for the child.
This could add up to £230 a year to the amount of state pension they receive in retirement.
Steve Webb, director of policy at Royal London, said:
“It is right and proper that when grandparents sacrifice their own working life to help a family member get back to work, they should not also damage their own state pension prospects.
We believe there are tens of thousands more grandparents who could be entitled to benefit and would encourage more of them to find out about the scheme and to make a claim.”
Coronavirus has stopped me from physically seeing my child, can I still claim?
Although the rules during the coronavirus lockdown may have prevented family members from physically taking care of children since March, they will still be entitled to the credits if they are providing virtual care over the phone or via video calls.
Helen Morrissey, pension specialist at Royal London, said:
“Grandparents have long carried out a vital service in taking care of grandchildren whose parents return to work and it is positive that this benefit exists to ensure those under state pension age do not miss out on National Insurance credits.
However, while it is really positive to see such growth in the number of applications we are still only scratching the surface when it comes to the numbers of people who stand to benefit.
The government’s recent clarification that those providing care via telephone or video is also welcome and will really help people plug gaps in their National Insurance record. We urge those caring for children under the age of 12 to check to see if they can claim.”
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