CashNews.co
A HMRC rule change means parents earning less than £60,000 annually can claim up to £2,214 per year.
This is due to an increase in the income threshold for Child Benefits payments eligibility, rising from £50,000 to £60,000.
This change has led to parents being urged to check their eligibility to cut school-related expenses instead of relying on high-interest credit.
Research from financial institution Lowell found that 54 percent of UK parents rely on credit products to cover essential school costs, 13 percent have used payday loans and 15 percent have even turned to buy-now-pay-later schemes for school expenses.
These loans are especially damaging against the background of higher inflation, with a 2.2 percent increase in July of this year according to the Consumer Prices Index.
John Pears, CEO of Lowell, said: “While these credit solutions can offer short-term relief, worryingly, 69 per cent of those surveyed using credit products are concerned about the challenge of repaying them.
“For some, this could lead to longer-term financial difficulties, including a negative impact on their credit score, which could affect their ability to be approved for credit in the future.
“As 66 per cent of parents surveyed said they had not reached out for support or advice for back-to-school costs, we want to reassure parents that there are other, often more manageable ways to get support with these costs.
“For example, local authorities or the school directly can provide tailored advice based on your situation, such as uniform grants and subsidiaries towards laptops and tablets for families who require support.”
He continued: “For many families across the UK, associated back-to-school costs such as uniforms can be difficult to afford, meaning many parents across the UK can find themselves worrying about their finances.
“Though credit can be a tool for helping to spread these costs, many credit products have high interest rates, and if unforeseen expenses occur, keeping up with credit repayments can become increasingly difficult.
“With this in mind, we wanted to provide parents with some insights and resources to help manage school expenses in the coming weeks. You can find a list of organisations ready to support you here.”
Child Benefit payments are currently set at £25.60 per week for the eldest or only child, which could increase income by £1,333 over the year, and £16.95 per week for each additional child, potentially adding up to an extra £881 a year. These rates were implemented on April 6, 2024.
The benefit is accessible to those caring for children under 16, or under 20 if they are in approved education or training. Payments are usually made every four weeks, but single parents or those receiving certain benefits can choose weekly payments.
Eligible parents can apply for Child Benefit as soon as 48 hours after registering a birth or when a child comes to live with them. All children in Year 1 and Year 2 automatically qualify for free school meals. For those in Year 3 and above, eligibility extends to families receiving Universal Credit or benefits such as Child Tax Credit, Income Support, or Income-Based Jobseeker’s Allowance.
Parents are urged to verify their eligibility for these benefits, as they can significantly assist in covering essential school costs.