HMRC confirms Child Benefit increase in April 2025: What families need to know
To ease financial burdens on families nationwide, HMRC has announced an increase in Child Benefit payments, set to take effect in April 2025, as part of the government’s response to escalating living costs. For many families, this increase will provide a much-needed financial boost, helping to ease the burden of everyday expenses. In this blog, we’ll explore the details of the Child Benefit increase, who stands to benefit, and what this means for families across the country.
What Is Child Benefit?
Child Benefit provides monthly funds to those responsible for children, extending to those in specific educational programs until they turn 20. It is designed to help families with the costs of raising children, covering essentials such as food, clothing, and educational expenses. As of 2017, it is limited to 2 children only, with some exceptions. The current rates are:
£25.60 per week for the eldest or only child.
£16.95 per week for the additional child.
Child Benefit payments are tax-free, but if either of the parent’s income exceeds £60,000, they might have to pay the High Income Child Benefit Charge. For those earning above this threshold, the value of the benefit is gradually reduced through taxation and entirely disappears for individuals earning over £80,000.
What has HMRC announced?
HMRC confirmed that Child Benefit payments will increase in April 2025, in line with inflation. The increase is 1.7% with the weekly rate for the eldest or only child increasing to £26.06, and the additional child rate increasing to £17.25. The adjustment is given to reflect the rising cost of living, ensuring that the benefit retains its value over time. The adjustment is given to reflect the rising cost of living, ensuring that the benefit retains its value over time. This announcement follows the government’s commitment to uprate benefits annually to keep pace with inflation, as measured by the Consumer Prices Index (CPI).
The increase is part of a broader package of measures aimed at supporting families during a period of economic uncertainty. With inflation remaining high and household budgets under pressure, the rise in Child Benefit will provide a welcome boost to millions of families.
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Who will benefit from the increase?
The increase in Child Benefit will benefit all eligible families, regardless of income level. However, the impact will be particularly significant for:
Low-income families – For families on lower incomes, Child Benefit is often a vital source of financial support. The increase will help them cover essential costs and reduce the strain on their budgets.
Single-parent households – Single parents, who often face higher living costs relative to their income, will benefit significantly from the additional support.
Families affected by the High Income Child Benefit Charge – While those earning over £60,000 may still be subject to the HICBC, the increase will provide some relief to families who receive a reduced benefit due to their income level.
Why is this increase important?
The increase in Child Benefit comes at a critical time for many families. The surge in living costs has created a substantial burden on the financial stability of households, with increasing prices of core living expenses like food, power, and shelter. Recent economic indicators suggest that inflation is holding steady at high levels, forcing many families to struggle financially.
For parents, the financial burden of raising children has increased substantially in recent years. From school uniforms and extracurricular activities to childcare and transportation, the costs associated with raising a family can quickly add up. The increase in Child Benefit will help to offset some of these expenses, providing families with greater financial stability.
What does this mean for families?
For families receiving Child Benefit, the increase will provide a direct boost to their monthly income. This additional support can be used to cover a wide range of expenses, from groceries and utility bills to school supplies and childcare costs.
For example, a family with two children currently receives £25.60 per week for the eldest child and £16.95 per week for the second child as Child Benefit. If the increase is in line with inflation, this amount could rise significantly to 1.7%, i.e £1,331 a year for the eldest child and £881 a year for each additional child, paid in 2024-25, providing families with hundreds of pounds more per year.
For low-income families, the increase will be particularly significant. It can make a substantial difference in their ability to meet basic needs and provide a better standard of living for their children. The extra funds can also help to reduce financial stress and improve overall well-being.
What should families do next?
While the increase in Child Benefit is automatic, there are steps families can take to ensure they are receiving the full amount they are entitled to:
Check your eligibility – Are you raising a child under 16, or a young person under 20 in approved education and not receiving Child Benefit? You may be entitled to it, and you can apply digitally on the HMRC website.
Update your details – Don’t forget to tell HMRC about any alterations to your circumstances, such as a new child or a different income level, so they can adjust your payments appropriately.
Heads up for those earning £60,000+ – The High Income Child Benefit Charge could apply to you if your or your partner’s yearly earnings are above this amount. Make sure you’re aware of the charge’s mechanics and how it could alter your benefit amounts.
Plan your budget – With the increase in Child Benefit, take the opportunity to review your household budget and allocate the additional funds to areas where they are needed most.
Conclusion
The confirmation of a Child Benefit increase in April 2025 is welcome news for millions of families across the UK. At a time when many households are feeling the pinch of rising living costs, this additional support will provide much-needed relief and help families manage their finances more effectively.
As we look ahead to April 2025, families can take steps to ensure they are making the most of their Child Benefit payments. Whether it’s checking eligibility, updating details, or planning a budget, these small actions can make a big difference in maximising the impact of this increase. To optimise your financial management and accurately interpret benefit adjustments, consider seeking advice from a reputable accountant.
