Grandparents are missing out on thousands of pounds in National Insurance credits, new figures suggest.

Only two grandparents per Parliamentary constituency are getting the money, analysts found, from a scheme for those who help their daughters get back to work after the birth of a child.

Officials at Royal London, which uncovered the statistics, said: “This is a tiny fraction of those who could benefit, at no cost to them or their children.”

The system, known officially as the ‘Specified Adult Childcare Credit’, is so little known just 1,298 grandparents (and other family members) benefited in the year to September 2016. This was smaller number than two years earlier when 1,725 were benefiting, according to the Freedom of Information figures.

Under current rules, if a mother goes back to work after the birth of a child she can sign a form that allows a grandparent (or other family member) to receive National Insurance credits for looking after the child.

A grandparent who gives up work to look after the grandchild would otherwise be losing out on valuable state pension rights. If a working age grandparent misses out on one year of state pension rights because they are spending time with a grandchild instead of doing paid work, this would cost them 1/35th of the full rate of the state pension or £231 per year. Over a 20 year retirement this would be a loss of over £4,500.

Calculations by Royal London suggested that there could easily be over 100,000 grandparents of working age who could benefit if the scheme was more widely known.

Ex-Pensions Minister Steve Webb, now Royal London director of policy, said:“Many families rely heavily on the support provided by grandparents to enable them to combine paid work and family life.

"The fact that there is a scheme to make sure that grandparents do not lose out, by protecting their state pension rights, is a very good thing. But the scheme is not much use if hardly anyone takes it up. The Government needs to act quickly to alert mothers to the fact that they can sign over the National Insurance credits that they do not need."

Dr Lucy Peake, chief executive of Grandparents Plus said: “Grandparents play a crucial role in caring for millions of children up and down the country, and are a lifeline to families squeezed by falling incomes and rising childcare costs.

“When they give up their own jobs to help out, they shouldn’t damage their future state pension in the process, and the system for making sure grandparents are protected in this situation needs to be much better publicised. The contribution they are making within their families and to the wider economy is enormous, and it’s important that it’s recognised.”

The number of applications for the Specified Adult Childcare Credit which have been approved since the system was introduced:
Oct 2012 – Sep 2013 498
Oct 2013 – Sep 2014 1725
Oct 2014 – Sep 2015 1168
Oct 2015 – Sep 2016 1298
Oct – Nov 2016 453