Wednesday, 3 December 2008

Grandma puts pension at risk when she stays at home to care for grandkids

The Daily Mail has launched a campaign to highlight the fact that although there are fairer pensions for stay-at-home mums, grandparents who are increasingly playing a major caring role in the family are at risk of being disadvantaged with their pensions. They point out that more than half a million families rely on grandparents to help care for their young children. But in fulfilling this vital family role, which is allowing mums and dads to earn a living, the grandparents are throwing away their chances of a decent state pension.

With the average age of becoming a grandparent just 51 or 52, this means grandmothers are jeopardising their pension prospects.

Unlike registered childminders, they don't qualify under the child-care tax system. Even if the child were looked after by a neighbour, the taxpayer would foot 80 per cent of the childcare costs to a weekly maximum of £175 for one child. The 55-year-old grandmother would not get a penny.

And while from 2010 women who care for older relatives will get an NI credit after 20 hours a week caring - as well as a carer's allowance and a full NI stamp at 35 hours - grandparents are again overlooked.

To qualify for a full state pension of £90.70 a week, women have to build up 39 years of national insurance contributions. This is being reduced to 30 for those retiring after April 6, 2010.

But while stay-at-home mums receive Home Responsibilities Protection to help to replace these missing NI contributions, grandmothers who give up work receive no help from the Government.

Samantha Smethers from Grandparents Plus adds: 'So many grandparents give up work to care for their grandchildren, yet they are being taken for granted.

'Many mothers prefer their children to be looked after by a close family relative rather than entrusting the care of their child to a complete stranger.

'More than 90 per cent of stay-at-home grandmothers do it for nothing. The least we can do for them if they do give up work to care for their grandchildren is to ensure that they don't miss out on the chance to secure that full basic state pension in retirement.'

The Government says that grandparents will benefit from the new rules allowing them to buy back extra years of missing NI contributions.

But Baroness Hollis says most grandparents will find this impossible if they are not earning: 'Stay at-home grandparents give the best possible care and love for the child. Giving them more financial help would strengthen family bonds and might mean a greater willingness 20 years down the line for the granny, in turn, to be cared for by her family.'

This seems to us a campaign that needs supporting.

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