Pupils who are eligible for free school meals are being sent to school with packed lunches instead, as parents fear their children may be stigmatised, research suggests.
More than 1.1 million children in the UK are entitled to free school meals, but around 300,000 of these do not register or take up the benefit.
Sitting apart from friends eating packed lunches in the school hall and the 'stigma' attached to free school meals are two key factors why parents don't opt for free school meals for their children, according to the study from the Institute for Social and Economic Research (ISER).
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The financial cost to parents is estimated at around £400 a year per child, but schools also lose out when parents decide against free school meals. Claiming free school meals also triggers payment of the Pupil Premium, £600 of extra funds per child for schools to help those from poorer backgrounds.
The research by Angus Holford at ISER, based at the University of Essex, looked at what happened in Scotland in 2007-2008, when school meals were made free for all five to eight-year-olds in five highly deprived areas of Scotland.
He found that uptake increased among children entitled to free school meals both during and after the experiment. Anonymised payment schemes, where parents pre-register to pay or to receive the benefit online for example, also increased take-up substantially.
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Getting more children overall to eat school meals could also help, as it reduces the likelihood that a child on free school meals is forced to eat apart from his or her friends, and also sends a signal that school meals are enjoyable and of good quality, Holford said.
He said: "Peer pressure is undoubtedly important. Results show that in a typical school a 10 percentage point rise in peer-group take-up would reduce non-participation by almost a quarter. This is both because children would rather eat with their friends, and because people set greater store by the actions of their friends and classmates than information from authorities.
"Schools should let all classmates eat together, at the same time, to reduce any stigmatisation. Introducing anonymised payment schemes would also dramatically increase take-up.
"Government initiatives to increase take-up would be best targeted at year groups in the most deprived areas rather than at individuals, as children are obviously responsive to the choices made by their school friends."
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Claire Rick, of the Children's Food Trust added: "At a time when many families are struggling to make ends meet, it's never been so important to do everything we can to encourage them to register for free school meals if they qualify, and to make sure that children then take up their meals once they're registered.
"Research shows that when children eat better, they do better in class, and for many children their school lunch can be the only proper meal they eat in a day. Strategies like allowing all children to eat together – regardless of the type of lunch they have, and making sure that children having free school meals can't be identified as such, are good starting points for any school wanting to work on this."