Just two grandparents per parliamentary constituency are benefitting from a scheme designed to help grandparents who make sacrifices to enable their daughters to get back to work, Royal London has found.

In a recent Freedom of Information request to HM Revenue and Customs, Royal London found that a considerable non take-up of a childcare credit scheme could result in the loss of £4,500 over a 20-year retirement.

The rules for the little-known Specified Adult Childcare Credit stipulate that if a mother goes back to work after giving birth she can sign a form that allows a grandparent, or other family member, to receive National Insurance credits for their childcare. A grandparent who quits work to look after their grandchild would otherwise miss out on state pension rights.

For a working-age grandparent, missing one year of state pension rights because they are looking after a grandchild would cost them £231 per year, 1/35th of the full rate state pension. Over a 20-year period this would exceed a £4,500 loss.

From the FOI, Royal London highlighted that the childcare credit is so little known that only 1,298 grandparents and other family members benefited in the year to September 2016. This was considerably less that the 1,725 individuals that benefited two years earlier, suggesting a downward trend in uptake and knowledge of the scheme.

Royal London has noted that there could easily be over 100,000 grandparents of working age who could enrol into the scheme if it was more widely known. As a result, the firm has called on the government to make these rights more known and utilised by a larger percentage of the population.

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.”

Grandparents Plus chief executive Dr Lucy Peake added:“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.”

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