Grandparents who look after grandchildren could increase their State Pension entitlement

31 July 2013

grandparentNever more acute a need than during the long school summer holidays, Grandparents Plus and Age UK have estimated that childcare provided by UK Grandparents is worth £7.3 billion a year. With 1 in 4 working families and 1 in 3 working mothers using grandparents for childcare, and 1 in 5 grandmothers providing at least 10 hours a week of childcare, the proportion of child-caring grandparents who are of working age is set to grow as the State retirement age gradually rises.

However, the Department for Work and Pensions (DWP) is The proposed flat-rate pension from 2016 of £145.40 is only earned with 35 years qualifying contributions. If grandmothers gave up their own careers to raise their families, they may not have enough years in the bank to qualify for the full amount and will receive a pro-rated smaller amount.

However, current child benefit rules state that whomever is claiming child benefit (often, but not always the mother for this very reason) can claim a National Insurance stamp for child caring responsibilities until the youngest child reaches 12 years of age. However, if the mother is working, she could earn enough to get her National Insurance stamp through her salary (earning at least £109 per week) in her own right.

Now, parents and grandparents can retrospectively claim to transfer some or all of the child benefit National Insurance stamp to grandparent (or other family member under State Pension age) carers. The claim must be sent to HM Revenue and Customs in the October after the end of the tax year (ie from 1 October 2013 for 2012/13 claims) and can be made for any number of weekly stamps, with no minimum child caring hours requirement on the grandparent/carer. More details are available in this HMRC information sheet.

This credit transfer is only available for credits from April 2011 onwards, but claims can also be made 2011/12 tax year now. 2012/13 claims cannot be made until October, as HMRC needs to check that the parent surrendering the child benefit credit has earned enough to generate their own credit before making a transfer. Both parent transferor and child-caring transferee must sign the form.

Pensions Minister Steve Webb said

“Many grandparents are working hard all year round looking after their grandchildren, and it is important that they do not damage their own state pension rights as a result. Such grandparents are contributing to society just as much as someone in a paid job and should therefore be entitled to the same protection for their state pension as if they were in work.”

TOPICS:   Banking


  • Clunge
    Slightly confused... so if the grandparents have already retired, then there's nothing that can be done? I suppose most of the grandparents who look after kids are already retired, otherwise they'd have their own jobs to do?
  • So T.
    ^Alas, in scummy estates throughout the land, there are grandmothers at 30 years of age. They probably drink Tennant's.
  • Alan
    So retarded I can't spell Tennant's your argument fails though because those in the scummy estates don't work and we will support them until the end of time
  • People P.
    “Such grandparents are contributing to society just as much as someone in a paid job...." No they are not - they are not paying tax or NI contributions. ".... and should therefore be entitled to the same protection for their state pension as if they were in work.” - no they shouldn't, people in work should always be rewarded more than those who are not - what type of behaviour is being encouraged here?
  • janis e.
    i am 56 years old and work 25 hours a week,i look after one of my granddaughters 25 hours a week.i know that there is gaps in my contributions and have been told that the government are changing things can you please explain how this works.
  • margaret
    I am a pensioner grandparent who has looked after my grandchildren for 12 years. I recieve retirement pension and occupational pension that I have worked and planned for to enable me to be financially well of in my retirement. NOW I find my earned pensions are counted as income for child tax credits so I am technically on a lOW income and put into poverty because I chose to support and keep the children out of care. I think for grandparents recieving individual pensions and bringing up grandchildren the pension income should be disregarded for tax credit purpose. Foster children carers are paid substancially from £104-500 a week yet grandparent pensioners are expected to subsidise the governments responsibilities on this subject.

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