Child Benefit shake-up sees 485,000 families get £1,260 boost plus increase to monthly payments

The Government will also increase the threshold at which point the High Income Child Benefit Charge kicks in, from £50,000 to £60,000, from April 6.

This means around 170,000 families will be taken out of paying a tax charge and an estimated 485,000 families will gain an average of £1,260 towards the costs of raising their children in 2024/25.

As it stands, families become subject to paying the High Income Child Benefit charge when one parent or guardian starts earning over £50,000 a year.

When a parent earns above this amount, they have to pay back one per cent of the Child Benefit they receive for every £100 earnt above £50,000, meaning all of the Child Benefit is lost to the tax for people earning £60,000 or more.

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However, changes made in the Spring Budget will see the rate at which the fee is charged halved from one per cent of the child benefit payment for every additional £100 earned above the threshold, to one per cent for every £200.

Families will now be charged when one parents earns above £60,000 - up £10,000.

This means that Child Benefit will not be withdrawn in full until a parent is earning £80,000 or more.

As well as thousands of families being able to save more than £1,000, HMRC has confirmed the increase in Child Benefit payments. Payments will increase from April 6.

Families with one child will now receive up to £1,331 a year – an annual increase of £83.20, and up to £881 a year per additional child – an annual increase of £54.60. There is no limit to how many children families can claim for.

Parents will receive £102.40 every four weeks (£25.60 per week) for the first or only child and £67.80 every four weeks (£16.95 per week) for each additional child.

Those with ongoing claims will see the increased payments paid into their accounts – they don’t need to contact HMRC.

If people need to update their personal details, such as a change of bank account or address, they can do so using the HMRC app or online at GOV.UK .

Laura Trott, Chief Secretary to the Treasury, said: “We are ending the unfairness in the child benefit system, and as a result 170,000 families will no longer have to pay back child benefit, and nearly half a million families will save an average of around £1,300 next year.

“The legacy of the pandemic and the war in Ukraine has put pressures on everyone’s cost of living.

“But, by taking difficult decisions, the economy is starting to turn a corner, and we can now provide further support to parents.”

Families also have the chance to boost their savings with the Government backed British Savings Bonds.

The NS&I products will offer savers a guaranteed return over three years for investments between £500 and £1million.

One finance expert suggested the attractiveness of the product will depend on the rate.

Sarah Coles, head of personal finance at Hargreaves Lansdown, said: “Unless this comes with a decent rate, there’s every chance this Bond is a George Lazenby. You can give him a Union Jack parachute, but he’s still unlikely to fly.”