Families across the UK are struggling financially amid the cost of living crisis, which is being exacerbated by an unprecedented rise in energy bills. While the Government’s energy price guarantee will cap household gas and electricity costs at £2,500, billpayers will still experience an energy bill hike of 27 percent. In light of this, experts are sharing how parents can get up to £2,000 year in tax break support to mitigate the increase in the cost of living.
Speaking to Express.co.uk, Rajan Lakhani, a money expert for smart savings app Plum, emphasised the “big difference” these tax breaks can make on the average family’s finances.
The father-of-two explained: “Make sure you take advantage of all the tax breaks that are available to you as a parent.
“These could make a very big difference, especially over the coming months with energy bills having rocketed and inflation already almost double-digits.
“For example, the Government provides support with childcare costs via tax-free childcare.
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“This helps working families, including the self-employed, to pay childcare costs for childminders, nannies and after-school clubs, until their child is 11 years old.
“The Government gives working parents with annual salaries up to £100,000 financial support worth £2 for every £8 you pay for childcare up to a maximum of £2,000 per child per year.
“You can receive up to £500 every three months for each child. The figure goes up to £1,000 every three months, up to £4,000 a year, if your child is disabled.”
The tax expert highlighted that those in receipt of certain benefit payments could get back even more on their childcare expenses by claiming relief.
He added: “With childcare costs in the UK among the highest in Europe, this is one tax break parents can’t afford to be missing out on.
“If you’re eligible for Universal Credit, you can also reclaim 85 percent of your childcare costs, worth up to £1,108 per month.
“The Government also offers 15 hours per week of free childcare for all three- and four-year-olds, rising to 30 hours for working families, and 15 hours for disadvantaged two-year-olds.”
When it comes to energy bills, parents are looking for easy ways to cut costs with minimum discomfort for their children.
Sharing exclusive tips with Express.co.uk, the experts at Reassured shared the best families can cut their energy costs outside of tax break support.
Smart meter contest
“Speaking to your kids about the current increase in energy prices may be difficult for them to understand, so it is important to carefully introduce them to this topic and rather than taking drastic measures, try and make it as fun as possible.
“If you have a smart meter in your home, you could maybe run a contest to see if you can lower last week’s usage. This way they can also see how much energy is being used and gain more understanding.”
Change the time you charge electrical devices
“Often it seems the easiest to just leave a phone, tablet, or gaming console on charge overnight.
“While most devices are fully charged within just a few hours they continue using electricity while left on charge with a full battery.
“You could agree with your kids on a certain time in the day to charge the device. If you and your kids tend to forget about these, then investing in a mechanical plug-in timer can be an option too.
“Even though they use a small amount of energy while plugged in, it will still save energy compared to leaving a device plugged in for hours.”