- 52% of parents are unaware of a pension-boosting scheme for grandparents worth up to £7,170 a year.
- Grandparents provide almost two days of childcare a week on average, with 62% doing it for free.
- Just 42,964 Specialist Adult Childcare Credit applications were made in 2023/24, despite around four in five being approved.
Millions of grandparents are missing out on a scheme that helps them boost their state pension - despite providing two days a week childcare on average.
New research from Confused.com found 52% of parents (an estimated 7.28million)* were unaware of the Specialist Adult Childcare Credit, despite grandparents providing an average of 2 days of childcare a week.
Thousands of grandparents could be missing out on the boost worth £7,170, as just 42,964 applications were made in 2023/24, according to HM Revenue & Customs (HMRC) data. With around four in five applications approved, take-up remains relatively low, but entitlement to the cash is high.
How many applications have been made
| Tax year | Applications | Approved | Rejected |
|---|---|---|---|
|
2020/21
|
19,075
|
15,927
|
3,148
|
|
2021/22
|
21,523
|
17,329
|
4,194
|
|
2022/23
|
29,967
|
22,575
|
7,392
|
|
2023/24
|
42,964
|
33,675
|
9,289
|
|
2024/25*
|
24,841
|
19,621
|
5,220
|
*Source: HMRC Freedom of Information response. Full year data.
Almost a third (29%) of grandparents provide childcare for three days or more per week, with 9% looking after children for between five to seven days a week. Although, a huge 62% of parents do not pay grandparents for childcare.
The Specialist Adult Childcare Credit allows eligible working parents or carers to transfer unused National Insurance credits to a grandparent or other qualifying family member who provides childcare for children under 12.
The family member must be over 16 and under state pension age at the time of caring for the child.
These credits can help fill gaps in a person's National Insurance record, increasing the amount of State Pension they receive when they retire.
The parent or guardian of the child must claim Child Benefit, and they'll need to countersign your application. You should also check your National Insurance record online. Claims can be backdated to 2011.
With childcare costs remaining high, grandparents are playing an increasingly important role in helping parents balance work and family life.
The survey also found parents expect to spend an average of £339 per child on childcare during the six-week summer holidays, with one in five (20%) expecting costs to exceed £500.
Tara Evans, Personal Finance Editor, at Confused.com, comments:"Grandparents are quietly providing an enormous amount of childcare for families across the UK, helping parents stay in work while saving them hundreds or even thousands of pounds in childcare costs each year.
"But our research suggests many families are missing out on a valuable pension benefit simply because they don't know it exists. If an eligible grandparent is looking after children while the parents are working, it's worth checking whether they could claim the Specialist Adult Childcare Credit.
"The application is relatively straightforward, and for people who have gaps in their National Insurance record, these credits could make a meaningful difference to their State Pension in retirement.
For more tips for parents over the summer holidays, read our money saving guide."
-ENDS-
Survey of 2,000 parents by OnePoll on behalf of Confused.com.
For more information on the scheme visit: gov.uk/guidance/apply-for-specified-adult-childcare-credits
Confused.com submitted an FOI to HMRC in May to ask how many Specialist Adult Childcare Credit applications have been made and accepted since 2020.
*Care charity Kinship estimates there are 14million grandparents in the UK
The amount added to your state pension would vary based on your individual case. The £7,170 figure is based on 20 year retirement and claiming SACC for one year on the new state pension, calculated by Land Clark & Peacock.
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