18 November 2023 , 07:00
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Grandparents, aunties and uncles could potentially boost their state pension by tens of thousands of pounds by looking after their younger family members.
Those who look after children could be entitled to Specified Adult Childcare Credits, which is awarded when parents sign over National Insurance Credits. This can help you plug gaps in your National Insurance record, which could benefit your state pension in later life.
Most people need 35 qualifying National Insurance years to claim the full new state pension - which is worth £203.85 per week - and ten years to receive anything at all. In order to qualify for Specified Adult Childcare Credits, the family member must have been under state pension age (currently 66) when they were caring for a child.
The child must be under the age of 12, or 17 if the child has a disability. Helpfully, there isn’t a set number of hours you need to be looking after the child for - and you can backdate claims.
You can backdate your claim back to 2011, so if you have since reached state pension age, but were under when you looked after the child, you could still qualify. In terms of the parent, they need to be entitled to Child Benefit - with this, you get the National Insurance Credit which is what is transferred to the family member.
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The parent will need to be building up their own National Insurance record - this means they'll likely be working - so they can transfer the National Insurance Credit to someone else without affecting their own state pension.
How much extra could be added to your pension through Specified Adult Childcare Credits all depends on how many years you claim. Steve Webb, partner at consultants LCP, gave the example of someone who claims for every year from the 2011-12 tax year to 2022-23. He said this could add an extra £3,600 roughly to a state pension every year.
He wrote in an article for The Telegraph: "Where the parent who claims the child benefit (typically the mother) is also going out to work then she is likely to be paying NI contributions and building up a year towards her state pension through that route. This means that the NI Credit which comes with the child benefit is going spare."
He added: "Note, however, that the Credit can only be transferred to one family member, even if more than one has been involved in looking after the child."
You'll need to fill outform CA9176on the Gov.uk website to claim Specified Adult Childcare Credits. Both you and the parent transferring the Credit will need to sign the form.