The summer holidays are approaching, which means millions of grandparents are bracing for a busy few months of informal childcare. Unbeknownst to many, the season could also boost your state pension. New data from wealth manager Quilter reveals that nearly 160,000 applications for Specified Adult Childcare Credits (SACC) have been approved over the past decade. This scheme allows parents to transfer their “spare” National Insurance (NI) credits to a family member who steps in to take care of a child under 12. This gives grandparents the opportunity to plug gaps in their NI record for free, rather than having to buy them.
Your state pension rate is based on your NI contributions history. To receive the maximum new state pension (currently £241.30 per week), you need around 35 “qualifying” years on your NI record. These are accumulated through working or claiming certain benefits. Anyone who took time out of the workforce without claiming benefits may have gaps, which can result in a lower state pension.
Claiming SACCs if you’re eligible for it is worth it, as just one qualifying year of these transferred credits can boost your state pension by roughly £350 per year. Over a typical retirement, it could put an extra £7,000 in your pocket. Given that buying a missing NI year voluntarily costs more than £900, this represents a huge saving. Despite a 40% surge in applications, one in five claims is rejected by HMRC. Rejections usually happen because the grandparent is already on track for a full NI record, or because the parent has opted out of the Child Benefit system. To transfer the credit, the parent must be registered for Child Benefit, even if they’ve opted out of receiving it because of higher earnings.
To cash in, the grandparent must be under the state pension age when the care took place. There is no minimum hourly requirement, and claims can be backdated to April 2011. Check your state pension forecast on the HMRC website. If you’re missing years on your NI record and have looked after a child under 12 since 2011, search for the form CA9176 on GOV.UK to get the credits transferred from the child’s parent or guardian (who will also have to sign it off). If you need extra help, the National Insurance helpline is available on 0300 200 3500.
If you’re one of the 18 million British households on a standard variable rate energy tariff, you have just days before your bills shoot up. Ofgem’s price cap will rise by 13% on July 1, adding approximately £221 per year to an average dual-fuel family’s annual bill – a jump that energy experts have been describing as the “biggest bill hike since the energy crisis started”.
Please don’t bury your head in the sand; switching to a cheaper fixed-rate tariff is so simple and so easy. Fixed rate tariffs allow you to lock in specific – and often lower – gas and electricity rates for a set period of time. Comparison site Uswitch says there are currently 27 fixed energy deals that undercut July’s price cap, with the cheapest offering savings of £284 per year.
With analysts predicting energy rates to increase again in October and remain high through winter, now marks a crucial time to act. Use websites such as Compare the Market, MoneySavingExpert or Uswitch to get a price quote. Just enter your details, such as your home address and gas and electricity usage, into their respective calculators to find out what deals are available. And another handy tip – under Ofgem rules, you can switch to a new energy deal up to 49 days before your current fixed tariff ends without paying any exit fees.
Voucher Codes is offering an exclusive 25% discount on orders over £40 at Matalan tomorrow [June 26] only. Enter SCORE20 online at checkout. The offer is only valid on full-price items that aren’t from third-party brands.