BBC Morning Live, finance expert said ‘there’s no minimum hours of care required’
A BBC expert has explained how grandparents could get themselves a £6,600 boost through helping with childcare. Appearing on BBC Morning Live, finance expert Laura Pomfret spoke out about a little-known benefit boost which people could claim to get back missing years of pension.
Many grandparents willingly lend a hand by caring for their grandchildren, especially during school holidays. However, many families don’t realise that a UK government scheme rewards this support financially. The scheme, called Specified Adult Childcare Credits, can give grandparents a significant boost to their future pension.
In order to obtain the maximum state pension, currently valued at £230.25 per week, an individual needs 35 qualifying years of National Insurance contributions. If a grandparent has gaps in their National Insurance contributions history, then childcare credits will be able to ‘fill in’ the gaps.
Laura said: “Our grandparents and family members are the unsung heroes of half terms and summer holidays, so again, thank you to all of you for doing that. And there is something in this number, but this is connected to National Insurance contributions and whether you are in receipt of the full state pension. So, you need 35 qualifying years of National Insurance contributions or credits to receive that full state pension, and this is gathered up over a lifetime.
“You would normally make these contributions through work. Throughout your working life, as you pay tax, you pay National Insurance. But also, you can get qualifying credits—you may have missing years that then get substituted in by credits for a few different reasons. You could have had gaps in work due to sickness, you could have been on maternity or paternity leave, you could have certain disability benefits that you receive and so you don’t work, you might be a caregiver for someone, or ultimately, you know, a stay-at-home parent.
“And so if you have these gaps, this is where you can apply for credits. This is referring to the Specified Adult Childcare Credit, which is to get you to the full state pension. So unfortunately, this isn’t a bonus over and above the state pension, but this is to help people out if you are a grandparent or a family member who isn’t in full receipt and you have missing years.”
She added that people can still boost their pension years: “You may have done something during those years, or be doing something this year if you’re not yet at state pension age, that can qualify you for it. So, you need to have cared for a child in the family under the age of 12 where the parent or guardian is claiming child benefit already, but they don’t need that credit because they’re working, so they’re already going to be providing those contributions. In that case, the credit can be transferred.
“Crucially, as well, there’s no minimum hours of care required; it’s very silent on that in the regulations. And credits can be backdated—not payments, but credits can be backdated back to April 2011, as long as the childcare was provided before the grandparent or family member reached state pension age. So there’s a few bits to it, but there is some truth in the figure.”
Show host Michelle Ackerley: “Yeah, where does this figure come from? I mean, it’s quite specific: £6,600.” Laura confirmed: “So this was from research for a wealth management company that looked at one year’s qualifying credit. So that’s 1/35th, if you will—you need 35 years of qualifying contributions. That could equate to, at the current state pension amount, to £330 per year of state pension. If you stretch that out over an average, you know, 20-year retirement where you’re in receipt of that, that’s where the £6,600 comes from.
“But crucially, that’s just one example and, you know, you can obviously backdate to 2011. If there were more years where you did provide that care, it could even potentially result in more across a pension. I think this is just one figure—take it with a little bit of a pinch of salt—but it just is a really good encouragement for all of you to go and check if you could qualify for this. It could get you up to, you know, full state pension amount, and across the full state pension receipt, that’s a lot of money.”
What people need to do:
Host Gethin Jones said :”Well, I think that’s the point. I think you might have stopped people in their tracks here thinking, “Right, there’s a couple of things you said there that resonate with someone at home thinking, ‘Well, that could be me—the 35 years, the gap, whatever it may be.’So if you are one of those people, how do you apply for the credits?”
Laura Pomfret said there are a few s to jump through.
- Check your National Insurance record: Firstly, we need to check whether we are eligible for this particular childcare credit, this Specified Adult Childcare Credit. The first place to go is your NI record on gov.uk and check if you’re short on these 35 qualifying years. And by the way, you can do that at any age. I could check mine today, someone that’s just started work could start it, all the way up to pension age. If you are full—if you’ve got your 35 years qualifying and if you receive the full current state pension of £230.25 per week—this isn’t for you. But that’s what we’re trying to get up to. We’re trying to make sure that everyone gets that full amount.
- Check the criteria: If you do have a shortfall, then see if you meet the criteria for this Specified Adult Childcare Credit. As we referenced, you have to be caring for a family member. You don’t have to be a grandparent, but it is half term, which is why we’re bringing the grandparents to the forefront. But you could be a brother or sister, you can be an aunt or uncle as well. Child in the family under the age of 12, and you have to have provided that care before you reach state pension age. It does exclude Channel Islands and Isle of Man, but it is all the other four nations are included.
- Child Benefit registration: Then you need to know that the parent or guardian of the child that you provided care for is registered for child benefit and they’re in receipt of that. Because that’s the credit that’s being transferred. And if they’re not in receipt of that, then again, you don’t meet the eligibility criteria because this is a scenario where they’re already working, they’re already going to hit that year’s contribution, so you kind of have that credit transferred to you.
- Submit application: Then, if you tick all those, you submit your application on gov.uk. Crucially, you submit it together with the parent. You apply for it as an individual who is entitled to get this credit, but you need to make sure that you’ve got the consent of the parent. You apply together. You’ll need things like dates for when you provided childcare, but other than that, you’ll just submit that through gov.uk.
To apply click here.
