HM Revenue and Customs (HMRC) figures show that at least 200,000 British families are not claiming Child Benefit because they think they are earning too much.
Families get £21.15 per week for the eldest or only child and £14 for all additional children.
This works out at £1,099 a year for one child and £728 for each additional child.
Where it can really cost someone dearly is that it could affect if they qualify for the State Pension currently worth £9,339 a year.
That’s because Child Benefit also provides National Insurance credits towards the State Pension, something many parents aren’t aware of.
READ MORE: Solar panels – are they worth it?
That way National Insurance credits are automatically given and people are not jeopardising their state pension when they come to retire.
Workers need to have paid at least 10 years in National Insurance to qualify for it.
If people have taken time out of their careers to look after children this could cause a problem.
It’s thought up to 200,000 British people are missing out on £179.60 a week when they come to retire because of this simple mistake.
It’s also important to make sure the parent with the lower income is the one that applies for Child Benefit because they will be the ones that need the NI credits.
The higher-earning partner will already be paying NI through their wages.
Meanwhile, it’s likely that more people will be caught out when it comes to the child benefit tax than ever before as the £50,000 threshold hasn’t changed since 2013.
It means basic rate taxpayers could be hit by the High Income Child Benefit Tax Charges (HICBC) because salaries have increased.
However, parents can make the most of allowances to bring themselves under the £50,000 threshold.
UK private pension savings and charitable donations made under the gift aid scheme can be deducted from their income, which might bring some under the threshold.
In order to calculate whether their income is over the threshold, taxpayers can go onto the Government’s Child Benefit tax calculator website.
If a person’s income is above the threshold, they will either get Child Benefit payments and pay any tax charge at the end of each tax year, or choose to waive Child Benefit payments.