How the Grandkids can pay your pension

It always fascinates me how cycles and patterns come around in life.

It seemed that during the 80s and 90s, people were moving out of their family home at an early age. Often this meant moving to a new town and starting a new life.  As a result, connections between generations got lost.

I’ve had a quick glance at some data to see if that assumption was correct, and according to the ONS, in 1997, 25% of 18 to 34 year olds were living at home with their parents. 

Now, people are living at home much longer.  In 2017, that figure had grown to 32%.

I think this means more and more people at keeping closer geographical ties with their families, like we used to do up to the first half of last century.

As a result, when these kids are starting their own families, they are often getting help from their parents to look after the kids whilst they work.

Grandparent childcare is a real thing that some of your clients may be doing and you can help them benefit financially from it.

Grandparents or family members who care for their grandchildren whilst the parents work, may be eligible to claim additional NI Credits towards their state pension.  This is particularly valuable if your clients have gaps in their NI record.

It is called Specifie

d Adult Childcare Credits and it works by transferring the NI credit attached to Child Benefit from the Child Benefit recipient to the family member who is providing care for a related child under 12 years old.

Currently, those in receipt of Child Benefit automatically qualify for National Insurance Credits that will count towards their eventual state pension if they don’t return to work.  However, when the parent does return to work, they are able to pass these credits on to a grandparent or family member who is caring for the child.

The grandparent/family member will receive a Class 3 NI credit for each week or part week that they cared for the child.  The credits were introduced in April 2011 and you must make an application to receive the credits and the credits can be backdated.

Each credit is worth 1/35 of the value of the state pension which is around £250 per year, so not inconsequential.

What counts as a family member:

  1. Mother or father who does not live with the child
  2. Grandparent, great-grandparent or great-great-grandparent
  3. Brother or sister
  4. Aunt or uncle
  5. Civil partner

How to apply:

Just tell your client to complete the form on the Gov.UK website:


We have prepared a copy of a letter you can use to send to your own clients telling them of this benefit. You can order your free digital download via our online store