With the summer holidays underway, many grandparents will be preparing to step in and provide additional childcare while parents conserve annual leave and manage the rising cost of formal childcare. What is far less widely recognised is that this support can also help strengthen their own retirement income.

Specified Adult Childcare Credits (SACC) offer a straightforward and cost-effective way to boost the State Pension, which remains the foundation of income in later life for most people.

For grandparents who have not yet built up the 35 qualifying years of National Insurance (NI) contributions needed for a full State Pension, these credits can make a tangible difference. Each additional year is worth around £350 a year in State Pension income, adding more than £7,000 over a typical retirement. This compares favourably with paying voluntary contributions, which can cost more than £900 for a single year.

Quilter analysis of HMRC data shows that more than 200,000 applications for these credits have been made since 2016/17, with nearly 160,000 approved. At a collective level, this is now adding over £55m a year to retirement income, illustrating the scale of the opportunity when the scheme is used.

The way the scheme works is relatively simple. Where a parent claims Child Benefit but does not need the associated NI credit because they are already building up a qualifying year, that credit can be transferred to a grandparent or family member providing childcare for a child under 12. There is no minimum number of hours required, and claims can be backdated to April 2011.

However, take-up is still not universal and some applications are unsuccessful. Around one in five claims are rejected, often because the applicant already has a qualifying year through work or is not eligible for the transfer. This underlines the importance of checking eligibility carefully before applying.

There are also important planning considerations. Choosing to opt out of Child Benefit entirely can remove the ability to transfer NI credits, even if the benefit itself would be clawed back through the High Income Child Benefit Charge. Maintaining the claim can therefore preserve valuable flexibility within families.

These credits represent a practical opportunity to address gaps in NI records, particularly for those who have spent time out of the workforce. This often affects women disproportionately. As families increasingly rely on informal childcare, ensuring these credits are understood and used effectively can play a meaningful role in improving long-term financial outcomes.

It is important to take professional advice before making any decision relating to your personal finances. Information within this article is based on our current understanding and can be subject to change without notice and the accuracy and completeness of the information cannot be guaranteed. It does not provide individual tailored advice and is for guidance only. Some rules may vary in different parts of the UK.