Could looking after the grandkids be the key to a boost in retirement income?


One in 10 grandparents is responsible for caring for grandchildren on a daily basis, according to research from Halifax.

While you might feel that taking care of your grandchildren isn’t hard work, or is a natural part of life, it could also be the key to a higher retirement income.

A recent report has shown that approximately 100,000 grandparents could be eligible to claim Childcare National Insurance Credits which will boost the amount of State Pension they receive when they reach State Pension Age. (Source: Department for Work & Pension (DWP))

Unfortunately, just 19,000 of those have claimed the credits due to them, leaving 81,000 grandparents potentially receiving a lower State Pension than necessary.

Could National Insurance Credits help you?

To claim the Full State pension, you need to have accrued 30 qualifying years on your National Insurance Record, or 35 years for the Full New State Pension. Qualifying years are periods during which you have made full National Insurance contributions, these come in three forms:

  1. Contributions taken from your income through your employer
  2. Voluntary contributions made directly
  3. National Insurance credits which are awarded alongside certain government benefits and to people who meet certain criteria

You can check your National Insurance record and find out how many qualifying years you have, by clicking here.

What happens if you have fewer qualifying years?

You need a minimum of 10 qualifying years on your record to receive any of the New State Pension. The amount you get rises in line with the number of qualifying years you have. Therefore, if you are relying on the Full State Pension to provide a foundation income in retirement, you will need to take action and fill in the gaps on your record.

Are you eligible for Childcare National Insurance Credits?

You might be eligible to claim Childcare National Insurance Credits if:

  • You are over 16
  • You provide regular care for a child under the age of 12
  • You were under the State Pension Age during the period for which you are claiming credits
  • The child’s main carer is in receipt of Child Benefits and has automatically received Class 3 National Insurance credits as part of it

The child’s usual carer will need to countersign your application for Childcare National Insurance Credits to confirm that you have cared for the child and that they are happy for you to receive the Credit.

Why are so many missing out?

Childcare National Insurance Credits are not automatically applied to your record. You need to actively apply for them. Additionally, you need to wait until the October following the end of the tax year you are claiming credits for, to apply. These complications may be one of the reasons 81% of eligible grandparents are missing out on credits due to them.

Helping others to boost their income

Now that you know whether you could claim Childcare National Insurance Credits, it’s time to pass the message on. If you know other grandparents who regularly look after children under the age of 12, why not send them this information?

Furthermore, National Insurance Credits could help stay-at-home mums to boost their retirement income. And, with research from Prudential showing that the average woman’s retirement income is £5,000 less than men’s, every little could help to equalise the playing field.

Many stay-at-home mums put off claiming Child Benefit, as their partner’s earnings are above the threshold, meaning that any money they receive, is reclaimed by the government. However, claiming Child Benefit does entitle mums to Class 3 National Insurance contributions, which will increase the number of qualifying years they have on their National Insurance record and thus, their eventual retirement income.

Those credits are applied regardless of partner’s earnings and can mean that claiming Child Benefit is worth it, even though the financial impact is not immediately seen.

What to do now

There are three ways to improve your National Insurance record and boost your eventual retirement income:

  • Claiming for National Insurance Credits you may be eligible for
  • Making voluntary contributions to boost your record
  • Continuing to work until you reach enough qualifying years

However, it is important to consider your State Pension as part of the wider retirement plan. Speaking to us can help you to determine what you will be entitled to, and how that income could be used in conjunction with any other pension provisions you have. Whether it’s a Workplace Pension or your life’s saving, we can help you to make sense of it all and ensure your retirement plan is on track to support the lifestyle you want.

To find out more about increasing your retirement income, please contact Sarah or Bev on 0115 933 8433.