Frozen tax thresholds push 35,000 more families into child benefit repayments
Tens of thousands more families will soon face repaying part of their child benefit due to frozen tax thresholds. The issue stems from fiscal drag, where wages rise but tax bands remain unchanged. By 2028-29, an estimated 359,000 households will be affected—up from 324,000 in 2025-26.
The high income child benefit charge currently applies to families where the highest earner brings in over £60,000. For every £200 earned above this threshold, they must repay 1% of their child benefit. Once income reaches £80,000, the entire benefit is clawed back.
Most newly impacted families will fall into the tapering range, with earnings between £60,000 and £80,000. Child benefit is currently £26.05 per week for the eldest child and £17.25 for each additional child. Over the next three years, around 35,000 more families will be pulled into the charge. The £60,000 threshold was last updated in 2024 and has remained fixed since. Some families reduce their taxable income through salary sacrifice schemes, such as increasing pension contributions. This lowers their earnings on paper and helps avoid the charge.
The number of families affected by the charge will continue to grow as wages increase but thresholds stay the same. Without further adjustments, more households will face repayments or lose their full entitlement. The system remains based on individual earnings rather than total household income.
