Nine in 10 grandparents still failing to claim 'nanny credit' that would boost state pension by thousands

A grandparent who looks after a child while the parent works can claim a National Insurance (NI) credit - Getty

More grandparents than ever before are claiming tax credits that boost their state pensions but the vast majority are still missing out, new figures reveal.

A little-known rule allows a grandparent who looks after a child while the parent works to claim a National Insurance (NI) credit.

NI credits determine how much state pension you receive. Under the new state pension – for those at state pension age after April 2016 – you need 35 years to qualify for the full amount of £155.95 a week.

Each year short of 35 reduces the payout by £230 a year, or £4,600 over a typical 20-year retirement.

Last year Telegraph Moneyreported that only 1,300 people claimed the credit in the 12 months to September 2016. Now new figures obtained via a Freedom of Information request show there were 9,486 applications between January and September 2017.

But Royal London – which submitted the request – estimated that  90pc of eligible grandparents were still missing out.

Rolling Stones frontman Mick Jagger became a father for the eighth time last year. He was already a grandfather to five and great-grandfather to one Credit: Michael Hickey/Getty Images

Steve Webb, a director at the pension firm, said: "This National Insurance credit is a valuable right and it is good news that the numbers claiming have risen so dramatically in such a short space of time. 

"But we believe that there are tens of thousands more grandparents who could be entitled to benefit and would encourage more of them to find out about the scheme and to make a claim."

The credit is only available to people of working age who are yet to begin receiving the state pension. Telegraph Money has previously revealed the plight of stay-at-home mothers who also miss out on state pension credits. 

There are other Government schemes available to fill in "missing" NI years. Different rules apply depending on your age and employment history – find out here how to increase your state pension.

Your pension age under the latest rules

Last year, a landmark Government review concluded that the state pension age would have to rise to 68 for millions of people sooner than expected.  

Until the announcement, the state pension age was intended to increase from 67 to 68 between 2044 and 2046. Now the increases will happen between 2037 and 2039 instead. 

The Department for Work and Pensions put this down to the increasing financial burden of paying out state pensions to retirees who are living for longer in retirement. 

Have a question about the state pension? Email: sam.brodbeck@telegraph.co.uk