18 January 2017

Grandparents who help their daughters get back to work after childbirth are missing out on thousands of pounds

3 min read

Steve Webb
Royal London



A Freedom of Information request to HM Revenue & Customs by Royal London has revealed massive non take-up of a scheme designed to help grandparents who make sacrifices to help their daughters get back to work after the birth of a child.

The FOI figures reveal that a scheme designed to help grandparents across the country is benefiting an average of just two grandparents per Parliamentary constituency. This is a tiny fraction of those who could benefit, at no cost to them or their children.

Under current rules, if a mother goes back to work after the birth of a child she can sign a form that allows a grandparent (or other family member) to receive National Insurance credits for looking after the child. A grandparent who gives up work to look after the grandchild would otherwise be losing out on valuable state pension rights. If a working age grandparent misses out on one year of state pension rights because they are spending time with a grandchild instead of doing paid work, this would cost them 1/35th of the full rate of the state pension or £231 per year. Over a 20 year retirement this would be a loss of over £4,500.

The FOI reply from HMRC shows that this system, known officially as the ‘Specified Adult Childcare Credit’, is so little known just 1, 298 grandparents (and other family members) benefited in the year to September 2016. This is actually a smaller number than two years earlier when 1,725 were benefiting. But calculations by Royal London suggest that there could easily be over 100,000 grandparents of working age who could benefit if the scheme was more widely known.

Royal London is calling on the Government to make these rights more widely known, particularly to new mothers, so that those who make sacrifices for the sake of their children and grandchildren do not lose out.

Royal London Director of Policy, Steve Webb said:

Many families rely heavily on the support provided by grandparents to enable them to combine paid work and family life. The fact that there is a scheme to make sure that grandparents do not lose out, by protecting their state pension rights, is a very good thing. But the scheme is not much use if hardly anyone takes it up. The Government needs to act quickly to alert mothers to the fact that they can sign over the National Insurance credits that they do not need."

Dr Lucy Peake, Chief Executive of Grandparents Plus said:

Grandparents play a crucial role in caring for millions of children up and down the country, and are a lifeline to families squeezed by falling incomes and rising childcare costs. When they give up their own jobs to help out, they shouldn’t damage their future state pension in the process, and the system for making sure grandparents are protected in this situation needs to be much better publicised. The contribution they are making within their families and to the wider economy is enormous, and it’s important that it’s recognised.


For further information please contact:

Royal London Press Office

Notes to editors:

1. Based on analysis of the 2014/15 Family Resources Survey, Royal London estimates that around 1.27 million working mothers with one or more child under 12 are relying on a grandparent to provide childcare. Of these, around 230,000 mothers are in their twenties and the child’s grandparent is therefore likely to be under state pension age. Some of these grandparents will still be working and not need the credit. But even if only half of these grandparents could benefit, this would still be over 100,000 potential beneficiaries.

2. Figures obtained under the Freedom of Information Act by Royal London show that the numbers of grandparents (and other relations) benefiting from the ‘Specified Adult Childcare Credit’ is as shown in the table below:

The number of applications for the Specified Adult Childcare Credit which have been approved since the system was introduced:
Oct 2012 – Sep 2013 498
Oct 2013 – Sep 2014 1725
Oct 2014 – Sep 2015 1168
Oct 2015 – Sep 2016 1298
Oct – Nov 2016 453