A little-known National Insurance credit could reward you and give you a financial boost
Providing regular childcare for grandchildren could do more than help your family. It could also help protect your State Pension entitlement through National Insurance credits. Grandparents who spend their time caring for grandchildren may be able to claim Specified Adult Childcare credits.
These are Class 3 National Insurance credits that can fill gaps in your National Insurance record and, in turn, build entitlement to the State Pension. The scheme applies to eligible family members who care for a child under 12.
The potential value can be significant over the long term. A full qualifying year can increase State Pension entitlement, though the exact benefit depends on your individual National Insurance record and circumstances. The often-quoted figure of around £7,000 represents the potential lifetime value of several years’ additional State Pension income, not a cash payment.
Who can claim the credits?
Grandparents can qualify if they are over 16 but below State Pension age when providing care, and the child’s parent or main carer receives Child Benefit but does not need the associated National Insurance credit. The parent or main carer must agree to transfer the credit.
The rules are not limited to grandparents. Other eligible family members can also qualify, including great-grandparents, aunts, uncles and siblings, provided the relevant conditions are met. The credit is available for each week, or part-week, in which eligible care is provided.
How does the system work?
When someone claims Child Benefit for a child under 12, they normally receive a National Insurance credit. If they already have a qualifying year from work or other credits, they may be able to transfer that credit to an eligible family member who provides childcare.
There is only one credit available for each Child Benefit claim, regardless of how many children are included in that claim. However, if different children have different Child Benefit recipients, more than one credit could be transferred.
What could it mean for your State Pension?
National Insurance credits can help fill gaps in your record. Under the current system, the full new State Pension is £241.30 per week in 2026/27, though the amount you receive depends on your National Insurance history.
This means that claiming available credits could be particularly valuable for grandparents with gaps in their record, such as those who have reduced their working hours or stopped work to provide care. It is important to check your record first, as you should not apply if you already have a qualifying year for the period concerned.
How can you apply?
Applications are made using HMRC’s CA9176 form. You must wait until 31 October after the end of the tax year for which you are claiming, and both you and the Child Benefit recipient must provide the required information and declarations. Credits can be claimed retrospectively from 6 April 2011, provided the eligibility conditions are met.
Before applying, it is sensible to check your National Insurance record and ask the child’s parent or main carer to check theirs. This can establish whether a credit is available to transfer and whether doing so could improve your eventual State Pension entitlement.
Don’t miss out on valuable credits
Grandparents often provide invaluable support to their families, yet the financial implications of that care can easily be overlooked. National Insurance credits could offer a way to convert some of that unpaid childcare into additional State Pension entitlement.
This article does not constitute financial advice and should not be relied upon as such. For guidance, seek professional advice.