In 2025, families across the UK will see a small but significant increase in Child Benefit rates. While the 1.7% rise may not seem like much, it could make a difference to family finances, especially with rising living costs. Understanding the new rates and how they affect your household is crucial for financial planning. Our article breaks down the changes and helps you understand what to expect from Child Benefit 2025.
What is Child Benefit?
Child Benefit is a payment from the government that supports parents and guardians with the cost of looking after their children. It is available to all parents and guardians of children under the age of 16, or under the age of 20 if the child is in full-time education or training. The benefit is paid weekly, and the amount depends on how many children you have.
Eligibility depends on the parent’s income, but in general, it is available to anyone responsible for a child. There are some exceptions for higher earners, especially those with an income above £60,000, as they may need to repay some or all of their Child Benefit through what’s known as the High Income Child Benefit Charge (HICBC).
Child Benefit Rates and What You’ll Receive in 2025
In 2025, the weekly rates for Child Benefit will rise by 1.7%. Here are the new weekly and annual amounts:
- Eldest or Only Child: £26.05 per week, or £1,354.60 per year
- Each Additional Child: £17.25 per week, or £897 annually
Here’s what this looks like for different families:
- A family with one child will receive £1,354.60 annually.
- A family with two children will receive £2,251.60 annually.
- A family with three children will receive £3,149.60 annually.
This increase offers a bit more support with everyday expenses, especially for families with more than one child.
How Child Benefit Affects Taxes
While Child Benefit provides helpful support, it may affect your taxes if your income exceeds certain thresholds. If you earn over £60,000 a year, you may have to repay part or the full amount of your Child Benefit under the High Income Child Benefit Charge.
- If your income is between £60,000 and £80,000, you repay a portion of your benefit.
- If you earn more than £80,000, the full amount is reclaimed.
The charge is calculated at 1% of the Child Benefit amount for every £100 you earn over £60,000. For example, if your income is £65,000, you’ll repay 5% of your Child Benefit.
Child Benefit Calculation: How It Works
The amount of Child Benefit you receive depends on the number of children you’re responsible for. To calculate your expected benefit:
- Multiply £26.05 by 52 for the eldest or only child
- Multiply £17.25 by 52 for each additional child
If your income is above £60,000, use the HICBC formula to calculate how much you may need to repay.
Conclusion
The Child Benefit 2025 rate increase will offer modest but crucial financial support to families across the UK. Understanding how much you can receive, how it affects your taxes, and how to calculate your benefits will help you plan your finances more effectively. If you’re unsure how the new Child Benefit rates or HICBC may affect you, use the official HMRC calculators to estimate your benefit. You can also book a free consultation with us to get personalised advice on your Child Benefit, tax position, and how to make the most of your entitlements.
