Child benefit: thousands more families will repay due to tax threshold freeze

Quilter's FOI and HMRC forecasts indicate about 35,000 more families will enter the high income child benefit charge over the next three years, with liable households rising from 324,000 in 2025–26 to 359,000 in 2028–29.

Tens of thousands more families are expected to repay part or all of their child benefit because tax thresholds have been left frozen. A Freedom of Information response reported by Quilter finds about 35,000 additional families will be pulled into the high income child benefit charge over the next three years. HMRC forecasts cited in the response show the number of families liable rising from 324,000 in 2025–26 to 359,000 in 2028–29. Key facts: - The high income child benefit charge starts when the highest earner's adjusted net income exceeds £60,000; repayments rise at a rate of 1% for every £200 over that threshold and reach full repayment at £80,000. - Child benefit amounts are reported as £26.05 a week for the eldest child and £17.25 a week for each additional child. - Quilter and HMRC data attribute the increase in liable families to fiscal drag, where nominal wages rise while thresholds remain unchanged. - A pledge to consult on moving to a household-based test, made in 2024, was not taken forward by the current Government and no further policy steps are specified in the available material. Summary: Rising nominal incomes against frozen thresholds are projected to bring about tens of thousands more families into the high income child benefit charge, increasing the number repaying some or all of the benefit. Future policy action on changing the measure used for the charge is not specified and is undetermined at this time.