How child benefit is changing this year

The number of families claiming child benefit has fallen to the lowest level since 2003, according to figures from HM Revenue and Customs (HMRC).

Since the introduction of the high-income child benefit charge in 2013, there has been a steady decline in the number of families claiming and receiving payments.

However, changes announced in the Spring Statement mean there will soon be less admin for parents who have to pay the charge.

Here, Which? explains how child benefit is changing in 2025 and why it could make sense to make a claim even if you opt out of payments.  

Child benefit increases by 1.7%

As of 6 April, parents receive £26.05 a week (£1,355 a year) for their eldest or only child and £17.25 a week (£897 a year) for each additional child.

These figures are a 1.7% increase on the £1,331 a year for the eldest child and £881 a year for each additional child paid in 2024-25, but families may be worse off in real terms.

This is because the annual benefit uplift is linked to the rate of inflation in September of the previous year. 

This year’s increase is based on the inflation rate from September 2024, when the Consumer Price Index fell to just 1.7%  – the lowest figure since 2021. 

Inflation has since risen again and currently sits at 2.6%.

• Find out more: child benefit rates and calculator 2025-26

It will be easier to pay the high-income child benefit charge

The high-income child benefit charge (HICBC) is a tax on child benefit that kicks in if you or your partner earn more than £60,000. 

Under current rules, you need to file a self-assessment tax return to pay the charge.

However, thanks to changes announced in the Spring Statement, families will soon be able to pay HICBC directly through their tax code.

Once registered with HMRC, parents will be able to choose to have their HICBC collected through their company payroll, meaning they’ll no longer need to file a return to report child benefit.

The changes will come into effect this summer and HMRC will get in touch with affected families when the new digital service launches. 

...but you could be charged more if you fail to pay

An investigation by Which? last year revealed how parents who didn't know about HICBC have faced hefty fines.

If you claim child benefit and you or your partner earn over £60,000, it’s currently your responsibility to report your child benefit to HMRC and pay the charge. 

If you don’t, you could be charged a penalty and interest on what you owe from the day payment was due.

With late payment interest on taxes now at 8.5%, it’s even more important to make sure you understand the rules and pay back any tax you owe on time.

If you or your partner earn over £80,000, you'll need to pay back your full benefit entitlement in HICBC. 

In this case, you might want to opt out of receiving payments. This means you won’t receive or be taxed on any money, but you’ll still receive National Insurance credits.

Child benefit and National Insurance contributions

Claiming child benefit could now save you up to £921 a year in voluntary National Insurance (NI) contributions – even if you choose not to receive any payments. 

This is because registering for child benefit automatically qualifies you for NI contributions, which helps build your state pension entitlement if you’re not working. 

If you’re in work, you can choose to transfer the contributions to your partner.

Another way to fill gaps in your NI record is by buying voluntary contributions. These currently cost £17.75 a week or £921 a year, so it can be worth claiming child benefit even if you or your partner earns more than £80,000 a year.

• Find out more: should I top up my state pension?