I'm a retirement expert – little-known FREE trick to boost your state pension by £3,000 a year and it takes just minutes | The Sun

A LITTLE-KNOWN rule could help thousands boost their state pension by £3,000, plus it's free and takes just minutes.

Mums and dads are turning to their parents to help look after their kids and cut expensive childcare costs.

But many grandparents don't know that they can be financially compensated for their time.

And their time could be worth thousands of pounds in extra credits from the government.

These credits are known as "specified adult childcare credits" and they count as a national insurance (NI) credit for those who don't otherwise work.

PensionBee research shows that 20% of 55 to 64-year-olds provide unpaid care for their grandchildren, meaning thousands are missing out on the vital cash boost.


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Becky O’Connor, director of public affairs at PensionBee, said: "These grandparents play an essential role in enabling parents to work, particularly amid the difficulties of finding affordable childcare. 

"However, it can over time negatively impact their ability to build up a pension pot.

"Therefore, it's imperative that working-age grandparents, who provide care to children under the age of 12, are aware of their eligibility to claim Specified Adult Childcare credit."

"These are National Insurance credits that are transferred from the working parents, who are claiming child benefit, to the non-working grandparents doing childcare."

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This extra credit 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 full State Pension is currently worth £10,600.20 per year.

Becky said claiming additional credits can "serve as a vital avenue to bridge any gaps that exist in a grandparent’s work history". 

She added: "Rather than embarking on additional years of employment or paying voluntary National Insurance contributions, applying for additional credits provides grandparents with the option to enhance their retirement income and be rewarded for their hard work looking after their grandchildren.

"They can be backdated to 2011."

If someone had been providing childcare every year since 2011/12, and now put in a claim for all years from 2011/12 until 2021/22, this would be eleven years of credits and could add just over £3,000 per year.

How to check if you're eligible

To be eligible, the carer must be under the state pension age, which is currently 66 years old.

The child must also be under 12 years old, or 17 if they have disabilities.

To claim, you must live in England, Scotland, Wales and Northern Ireland, but not the Channel Islands or the Isle of Man.

Plus, you're only 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.

There is no minimum requirement for the number of hours of care to qualify.

And if you looked after your grandkids remotely during lockdown, you can also still claim.

You can check your national insurance record on the GOV.UK website to see if you have any gaps in contributions.

How much can you claim?

How much you'll get in extra credits depends on how long you've been looking after your grandchildren.

Each yearly credit is worth 1/35 of the value of the state pension, which is currently around £275 per year.

This works out at around £5,000 over a 20-year retirement.

You can also backdate claims from as far back as 2011.

So if you've been taking care of your grandkids since 2011, you could get around £3,000 towards your state pension.

To calculate how much you'll get, simply multiply the number of years by £275 to get a rough idea.

How to claim the credits

These credits are complicated as getting them involves parents signing over their child benefit national insurance credit to someone else.

Of course, parents should only do this if they're already working or earning credits another way themselves.

You should also be aware that only one grandparent or family member can receive the credit and the credit isn't per child, but per child benefit claimant.

So if, for example, two grandparents care for their daughter and her partner’s two children, there is only one credit available and the daughter will have to decide which grandparent should have the credit.

But if the grandparents care for their daughter’s child and their son’s child, there are likely to be two child benefit recipients – one for each set of parents.

So then there would be two national insurance credits available for transfer.

You can apply for the credits using this form on the government's website.

Applications for Specified Adult Childcare Credits can be made from the October after the tax year the credits are being applied for.

Once you've filled in your details, the child’s parent (or main carer) must also agree to your application by countersigning the form.

If you need any help you can call the national insurance helpline on 0300 200 3500.

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Meanwhile, we explain ways to boost your state pension by up to £3,800 this year.

Plus, one mum told us how she got £250 free cash while on maternity leave with little-known tax break.

Do you have a money problem that needs sorting? Get in touch by emailing [email protected].

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