Grandparents of working age who provide childcare for relatives received a pension boost when the Chancellor announced that they will gain credits towards their entitlement to a basic state pension for the first time.

Grandparents of working age who provide childcare for relatives received a pension boost when the Chancellor announced that they will gain credits towards their entitlement to a basic state pension for the first time.

Adults who look after grandchildren or other family members who are aged 12 or younger, for 20 hours or more every week, will qualify for National Insurance contributions from April 2011, Alistair Darling said.

The move will mean those who give up work to help with childcare will no longer miss out on National Insurance contributions. The government said the measure was part of reforms to the state pension to make it fairer and more widely available.

Mr Darling said: "Increasingly, grandparents play a big role in family life and in looking after their grandchildren. To reflect this we will, for the first time, ensure these caring responsibilities for grandparents of working age will count towards their entitlement for the basic state pension."

Figures published by Grandparents Plus show childcare provided by grandparents is worth £3.9bn, and the organisation has campaigned for grandparents to get credit towards their pension if they provide childcare and cannot work as a result.

Sam Smethers, chief executive of Grandparents Plus, said: "We know that it is largely women of working age and low incomes themselves who do most of the grandparental childcare. It is really important that the least we do is protect their pension entitlement."

The Budget included a package of measures designed to help those already getting pensions, including plans to maintain a higher level of winter fuel payment, worth £400 for those over the age of 80 and £250 for households over the age of 60.

Mr Darling acknowledged that falling interest rates had reduced the amount of interest paid on savings and this had affected pensioners. He raised the limit on savings that older people can have before their pension credits are reduced from £6000 to £10,000 from November, and said this would mean an average of £4 extra a week for 540,000 households.

He also re-affirmed the commitment to increase the basic state pension by at least 2.5%. "So if RPI inflation this September is below zero, as we expect, pensioners can be confident that their pensions will rise in real terms," he said.

But while the extra support for grandparents was welcomed by Age Concern and Help the Aged in Scotland, the charity labelled it a "sweet and sour Budget" for elderly people.

Charity spokesman Lindsay Scott warned that pensioner households had been affected by soaring costs of food and fuel.

"There are some things that are of benefit in the Budget but it is also marked by glaring omissions," he said. "The measures to help low-income savers have to be welcomed, especially as they in particular are suffering from low interest rates. The additional winter fuel payments should also provide a bit of cheer.

"This was supposed to be a budget for jobs but workers over the age of 50 have slipped under the radar. Unemployment in the over-50s has risen at a higher rate in the past year than any other age group but there is lots of help for young people. It is highly likely that those over the age of 50 will be a lost generation."

He said more should have been done to prevent fuel poverty after recent fuel-price rises.

George Burgoyne, from Bothwell, Lanarkshire, was "disappointed" with the Budget. The 75-year-old, a former nursery garden owner, said: "When people who are elderly now put aside savings in the past they were doing it at a time when pay was not terribly high. They had to do without to pay that money into the savings bank.

"They have been so reliant on their savings because the increase in the pension has not kept up with the cost of living. Now the savings rate has gone away down, practically to zero.

"There should have been more to allow pensioners to get a straightforward return on their savings."

The National Pensioners Convention (NPC) said the Chancellor's announcement that he would guarantee the 2.5% increase in the state pension was "virtually worthless" and would do little to tackle fuel poverty and the impact the recession was having on older savers.

Dot Gibson, general secretary of the NPC, said: "Millions of older people have lost money from their savings.

"This generation has tried to put money aside for a rainy day - but no-one warned them of an economic monsoon.

"Extending the scope of the means-tested pension credit is not the answer.

"A better way to boost the economy and help all older people would be to raise the state pension to around £165 a week."