Grandparents and other family members who provide childcare for working parents could be eligible for a significant boost to their State Pension, equating to approximately £359 per year. This benefit comes in the form of National Insurance (NI) credits, which help ensure that those caring for children do not miss out on contributions towards their future State Pension entitlement.
The scheme, known as Specified Adult Childcare credits, allows a grandparent or other family member to transfer the NI credit attached to Child Benefit from the working parent to themselves. This is particularly relevant for those who might otherwise have gaps in their NI record due to their childcare responsibilities, potentially impacting their ability to qualify for the full new State Pension.
Since its inception, the programme has seen considerable uptake. Between 2016 and 2025, a total of 160,000 successful claims for these annual credits have been processed. This indicates a growing awareness and utilisation of a benefit designed to recognise the informal childcare economy that underpins many working families in the UK.
Crucially, the eligibility criteria stipulate that the child's parent or main carer must be entitled to Child Benefit and have a qualifying year for National Insurance purposes. The parent then needs to agree to transfer the NI credit to the family member providing the care. This ensures that the credit is not duplicated and is assigned to the individual who most needs it to bolster their pension prospects.
For many families, grandparents play a vital role in enabling parents to work, often providing care that would otherwise be costly. This credit offers a tangible, albeit modest, recognition of that contribution, helping to safeguard the financial future of those who dedicate time to support the younger generation.