Figures from LV=’s 13th Cost of a Child study reveal half (49%) of parents are confused by the array of state benefits available to them, and many don’t claim them even though they are eligible.
All parents qualify for Child Benefit if they earn less than £60,000 a year. Based on income levels, three quarters (76%) of parents are eligible for this benefit, but only six in ten (61%) claim it. Child Benefit provides parents with up to £1,076 a year for the first child so, with the cost of raising a child now averaging more than £11,000 a year, it could offer families significant support.
LV= also found that a third (32%) of parents would need to rely on state benefits if the main breadwinner was unable to work due to illness or injury, but three in ten (28%) say they wouldn’t know how to claim Employment and Support Allowance.
With previous LV= research showing six in ten (60%) parents are struggling with their finances, LV= is asking Government to make the rules around state benefits clearer so parents can understand what support they are entitled to and how to claim. We also want Government to provide greater clarity on how other arrangements – such as private insurance – can complement state benefits, so those who choose to protect their income themselves aren’t disadvantaged.
Myles Rix, Managing Director, Protection at LV= said: “It’s worrying that so many parents are confused by the system and aren’t taking advantage of the support they’re entitled to. We urge parents to think about putting a financial safety net in place to help them if they’re unable to work, as while state benefits are important they are not guaranteed and often only provide the most basic support.
“With the introduction of Universal Credit bringing yet more changes, the Government should focus on making it easier for parents and financial advisers to understand what support is available, and not penalise those parents who have protected themselves."