Government gives grandparents more credit

Grandparents who give up work to look after their grandchildren will no longer lose out on their basic State Pension thanks to Government action.

Working age grandparents could be missing out on retirement money when they stop working before building up enough National Insurance credits to get a full basic State Pension. On average people become grandparents for the first time at age 49 - a contrast to the commonly held perception that all grandparents are pensioners - and often give up work to provide childcare to a grandchild.

Today, the Minister for Pensions Steve Webb launched a consultation on changes to National Insurance credits including how they will be awarded to grandparents.

He said: "I have supported the idea of a Grandparents' Credit for many years. For too long the vital child-care that grandparents provide so that parents can work has been overlooked by the system.

"It is about time that we protect the pension rights of grandparents, many who are in their early 50s and giving up work early to provide vital child-care.

"Parents of children under 12 and carers receive a credit towards their basic State Pension so it makes sense to extend this to grandparents of working age too."

The credit will be added to an individual's National Insurance contributions record and count towards their basic State Pension. From April 2010, thirty years of National Insurance contributions are needed to qualify for the full basic State Pension.

The credits will be aimed at grandparents, and anyone who is providing care for a young relative under the age of 12.

Chief Executive of Grandparents Plus, Sam Smethers said: "We warmly welcome the introduction of the Grandparent National Insurance Credit. We know that working age grandmothers on low incomes provide a substantial amount of childcare. Until now they have done so with the risk that they could miss out on a full basic state pension.

"This is also an important victory for the principle that grandparental childcare does count and should be recognised. We believe it has implications for other areas of government policy."