Grandparents who have chosen full time childcare as opposed to full time work are forfeiting Government credits that could be costing them an exponential amount of money in state pension.
The pensions of grandparents who opt for early retirement so that parents can return to work are protected through the “specified adult childcare credit.”
Every year out of work takes £231 a year from the state pension. Over a 25 year retirement that equates to a loss of £5,800.
Statistics show that only 1,298 grandparents claimed this credit in 2016. This means that over 100,000 grandparents of working age may be eligible.
Further research has also revealed that stay at home mothers are also missing out on state pension credits. More grandparents are assisting with childcare because nursery care costs are increasing quicker than inflation or wages.
Information from the Office of National Statistics reveals that 1.3 million working mothers with children under the age of 12 are forced to rely on their parents for help.
Former pension’s minister, now director for Royal London Steve Webb said: “Families don’t seem to have any choice but to rely on grandparents to enable them to combine work and family life.”
“The scheme to protect state pension rights is fantastic, but if no one knows about it what’s the point?”
The new state pension amounts to £155.65 a week and it is based on having paid national insurance contributions for 35 years. You are still eligible if you don’t meet the 35 years, however, you will lose a 35th of the total amount for each year that doesn’t add up.
A spokesman for the Department for Work and Pensions said:
“All information concerning tax credits is made available through the company website. Yes, the scheme is available but it applies only to very specific circumstances.”
Photo credit: Kaleb Fulgham