Thousands of grandparents are claiming valuable Specified Adult Childcare Credits to increase their retirement income
Category: Economy
As summer approaches, many grandparents are gearing up to take on childcare responsibilities, a role that not only supports their families but can also yield a surprising financial benefit. For those who might not be aware, there exists a little-known scheme called Specified Adult Childcare Credits (SACCs) that allows grandparents and other relatives to boost their State Pension entitlement by caring for children under the age of 12. This initiative has gained traction recently, with thousands of grandparents seizing the opportunity to secure their financial future.
According to data obtained from HM Revenue and Customs (HMRC) through a Freedom of Information request by wealth manager Quilter, over 202,000 applications for SACCs have been submitted between the years 2016 and 2025. Of these, approximately 79%—or 159,116 applications—were approved, highlighting the significance of this scheme in enhancing retirement incomes.
So, what exactly are Specified Adult Childcare Credits? These credits are intended to help individuals below State Pension age build up their pension rights and address gaps in their National Insurance (NI) records. The mechanism is straightforward: when a parent or primary carer receives Child Benefit, they can transfer their NI credits to a qualifying family member—like a grandparent—who provides childcare for a child under 12. This transfer can be particularly beneficial for those who may have taken time off work, as missing NI years can significantly reduce the amount of State Pension one receives in retirement.
Jon Greer, head of retirement policy at Quilter, explains, "For many people, securing the full State Pension is a key foundation of later life income, and these credits can offer grandparents a relatively simple way to strengthen their entitlement... Ensuring they are able to access the pension benefits linked to that support remains an important part of the wider retirement system." With the rising costs of childcare, many families are increasingly relying on grandparents for support, making this scheme more relevant than ever.
The number of applications for SACCs has surged in recent years, jumping from just under 30,000 in the tax year 2022-23 to nearly 43,000 in 2023-24. This spike follows increased media coverage that has heightened public awareness of the program. The HMRC's response indicates that this surge reflects a growing recognition of the importance of these credits for grandparents who provide childcare.
Interestingly, the collective impact of successful claims now adds more than £55 million annually to retirement incomes across the UK. This financial boost can amount to about £350 a year for each successful claim, potentially increasing pension payments by over £7,000 throughout retirement. Such figures highlight how a little-known benefit can translate into substantial financial rewards for those who qualify.
To qualify for these credits, applicants must be below State Pension age and must have provided care for a child under 12 whose parent is claiming Child Benefit. Notably, there is no minimum number of childcare hours required to make a claim, which makes it accessible for many grandparents who may only assist occasionally.
Importantly, maintaining a Child Benefit claim is advantageous; withdrawing completely can result in no NI credits being available for transfer. Greer notes, "The data also highlights that a number of applications remain unsuccessful, which points to a need for clearer guidance around eligibility and how the system works in practice." Common reasons for rejection include applicants already having a qualifying year of NI due to employment or receiving other credits.
As childcare costs continue to rise, the role of grandparents in supporting working families is likely to become even more pronounced. The SACCs scheme provides a financial incentive for grandparents to assist with childcare and addresses the broader issue of pension adequacy, especially for women who are disproportionately affected by gaps in their NI records.
Experts are urging greater awareness of this benefit, as many grandparents may not realize they are eligible. With thousands already benefiting, it’s clear that this hidden pension boost could significantly impact the financial futures of many families. As Greer emphasizes, "Ensuring these credits are properly understood and used will only become more important."
For those interested in applying, claims can be backdated to April 6, 2011, and applications for any tax year can only be submitted after October 31 of the following year. This means that grandparents can still claim for financial years stretching back several years, providing a valuable opportunity to improve their retirement outlook.
In a time when financial security in retirement is a growing concern for many, the Specified Adult Childcare Credits scheme stands out as a practical solution for eligible grandparents. As more families navigate the challenges of childcare, the potential for these credits to provide both immediate support and long-term financial benefits matters. With the right information and guidance, countless grandparents could transform their caregiving roles into a meaningful enhancement of their retirement income.
As we move into the summer months, it’s a timely reminder for families to explore all avenues available to them—and for grandparents, this could mean not just being a loving caregiver, but also securing a brighter financial future.