Skip to content
Master Your Finances — Master Your Money — Master Your Money

35,000 more families to lose child benefit by 2029 due to frozen tax rules

A silent tax trap is closing in. As wages rise but thresholds stay frozen, 35,000 more families will see their child benefits vanish—or demand repayment.

,   and  Administrator
2 min read
This is an outside view. Here I can see few children are standing, raising their hands up and...
This is an outside view. Here I can see few children are standing, raising their hands up and giving pose for the picture. Few children are holding a banner. I can see the grass on the ground. On the right side there is a pole and on the left side there are some trees. At the top of the image I can see the sky. At the back of these children there are some blocks.

35,000 more families to lose child benefit by 2029 due to frozen tax rules

Tens of thousands more families will soon face repaying part or all of their child benefit. The change comes as frozen tax thresholds pull more households into the 'high income family benefit charge'. Currently, the family benefit is worth £26.05 a week for the eldest child and £17.25 for each additional one.

The number of affected families is set to grow steadily over the next few years, with many caught in a tapering system that claws back payments based on earnings.

The threshold for the charge was last increased in 2024, rising from £50,000 to £60,000. Now, if the highest earner in a household brings in more than £60,000, they must start repaying some of the family benefit. Once their adjusted net income reaches £80,000, the entire amount must be returned.

Most newly affected families will fall into the tapering range, where earnings sit between £60,000 and £80,000. By 2028-29, the number of families liable for the charge will climb from 324,000 to 359,000—an increase of around 35,000 over three years.

Fiscal drag, where wages rise but tax thresholds remain static, is pushing more households into this bracket. Some are turning to salary sacrifice schemes to lower their taxable income and avoid the charge.

No government has reversed plans for reforming the system, despite speculation. The child benefit increase to €259 per month and child allowance rise to €6,828 (or €3,414 per parent) from January 2026 remains unchanged.

The shift means more families will see their child benefit reduced or fully reclaimed. Those earning between £60,000 and £80,000 will face gradual repayments, while higher earners will lose the entire family benefit. Without further adjustments to the thresholds, the trend is expected to continue in the coming years.

Read also:

Related

Latest