MORE than 150,000 grandparents could be missing out of on a hefty pension boost.
Brits looking to retire could see their payments go up by £6,875 more over five years by claiming extra National Insurance (NI) credits, according to new research from St James’s Place (SJP).
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The investment experts found that 21,000 people applied for specified adult childcare credits last year.
But, the firm believes that a huge 150,000 grandparents are actually eligible for the NI credits.
Specified adult childcare credits come from the government and are worth £275 a year.
They’re issued to grandparents or other family members who are taking on childcare for the child’s parent.
They count as NI credits for those who don’t otherwise work and you can apply for the credits for your state pension entitlement for the previous tax year.
This is important because you need at least 10 years’ worth of NI credits to qualify for the state pension, and at least 35 years’ worth to get it in full.
The maximum amount you can get is now £204 a week, and £10,608 in total over a year.
You may be entitled to receive these NI credits if you care for a child under 12, or 17 if they have a disability.
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New figures from SJP have revealed that for someone who can boost their credits from 30 to 35 years, that could be equivalent to £1,375 per year more than they receive when they retire.
Over the five year period this would equate to £6,875.
Claire Trott, divisional director for retirement and holistic planning at St. James’s Place, said: “The state pension is the cornerstone for many when planning for retirement, so it is crucial to make sure you have accrued enough NI credits.
“With so many grandparents helping out with childcare it’s important to remember you don’t have to sacrifice your state pension to lend a hand and support your family.”
So if you are falling short on your NI contributions due to not working, it’s worth seeing if you are eligible for specified adult childcare credits.
Who is eligible?
The carer, so the grandparent or other family member, must be under the state pension age to claim adult childcare credits.
The child being cared for also has to be under 12, or 17 if they have a disability.
You have to live in England, Scotland, Wales and Northern Ireland.
However, you won’t qualify if you live on the Channel Islands or the Isle of Man.
Crucially, you will only be eligible if the child’s parent is entitled to child benefit and has a qualifying year for National Insurance without needing the parent’s class 3 national insurance credits which they receive automatically from child benefit.
You don’t have to have cared for the child for a certain amount of hours to apply.
And if you looked after your grandkids remotely during the multiple coronavirus lockdowns, you can also make a claim.
You can find out if you’ve got gaps in your National Insurance record by going on gov.uk.
How much can I claim?
How much you can claim depends on how long you’ve been looking after your grandchildren.
Each yearly credit it worth 1/35 of the value of the current state pension, which is around £275 a year.
You can also backdate claims from as far back as 2011.
That means if you’ve been looking after your grandkids since then you could get around £3,000 added to your state pension.
To work out what you could get, multiply £275 by the number of years you’ve been covering childcare.
How can I claim the credits?
You can apply for specified adult childcare credits on the government’s website via an application form.
You’ll need a couple of things to hand, including your personal details, the child’s personal details and how long they’ve been cared for, the child’s parent’s personal details.
Both the person applying for the credits and the parent have to sign a declaration on the application form too.
The process involves parents signing over their child benefit National Insurance credit to someone else.
Bear in mind, only one grandparent or family member can claim the credit and the credit isn’t per child, but per child benefit claimant.
But, that means if you claim child benefit for two children you can claim for effectively two National Insurance credits to be transferred across to you.
If you need help making an application, you can call the National Insurance helpline on 0300 200 3500.
The news comes as from yesterday (April 10), pensioners will see their weekly payments rise by almost £19 after the government increased the rate by 10.1%.
State pension isn’t the only payment going up either, those on Universal Credit and other benefits will also see increases from yesterday,
Do you have a money problem that needs sorting? Get in touch by emailing [email protected]
