Grandparents offering childcare over the summer holidays could boost their State Pension by £7,000 through little-known NI credit

Grandparents who step in during the holidays to provide care for their grandchildren can boost their State Pension by around £350 a year - or£7,000 over the course of a typical retirement.

Almost 160,000 people have successfully claimed extra National Insurance credits for looking after grandchildren, helping fill gaps in their record and increasing retirement incomes by an estimated £55 million every year.

But experts estimate thousands more grandparents and other family members could still be missing out.

Here's what you need to know...

What are Specified Adult Childcare Credits?

Specified Adult Childcare Credits are National Insurance credits that can help build up your entitlement to the full State Pension.

They are designed for grandparents or other family members who look after a child under the age of 12 so that the child's parent or main carer can work.

Normally, the parent receives National Insurance credits automatically if they claim Child Benefit.

However, if they do not need those credits because they are already paying enough National Insurance through work, they can transfer them to the grandparent or family member providing childcare.

Each successful claim gives the carer one qualifying year of National Insurance worth around £350.

How much could you increase your State Pension with childcare?

Every additional qualifying year of NI credits can increase your State Pension by around £350 a year, based on current full new State Pension rates.

Over a typical retirement, that could add more than £7,000 to your retirement income.

Nearly 160,000 successful claims made over the past decade are estimated to now be adding more than £55 million to pension incomes every year.

Jon Greer, head of retirement policy at wealth manager Quilter, said: “For grandparents who have taken time out of work to support childcare, these credits can make a meaningful difference to retirement income, particularly when compared with the cost of filling gaps through voluntary contributions, which can exceed £900 for a single year.

 “For many people, securing the full state pension is a key foundation of later life income, and these credits can offer grandparents a relatively simple way to strengthen their entitlement while helping family with childcare."

Who can claim NI credits for childcare?

You may be able to claim Specified Adult Childcare Credits if you are below State Pension age and have a gap in your record.

You will also need to regularly care for a child aged under 12 with the child's parent or main carer claims Child Benefit.

There is no minimum number of hours you need to provide childcare, the parent will just need to agree to transfer their National Insurance credit to you.

How do you apply?

You can apply by completing the Specified Adult Childcare Credits application form available on GOV.UK.

The parent receiving Child Benefit will also need to agree to transfer the National Insurance credit.

Specified Adult Childcare Credits can be backdated to 6 April 2011, provided you meet the eligibility rules.

Why is claiming Child Benefit so important?

Even if parents choose not to receive Child Benefit because of the High Income Child Benefit Charge, it is still important to make a Child Benefit claim.

That's because claiming Child Benefit creates the National Insurance credit that can later be transferred to a grandparent or another eligible family member.

If no Child Benefit claim is made, there may be no National Insurance credit available to transfer.