How to navigate the child-benefit maze

The child benefit system is infernally complicated and rife with potential pitfalls.

Woman with a crying baby
Mothers with young children often miss out on National Insurance credits
(Image credit: © Getty Images/iStockphoto)

Get it wrong when filling in the paperwork to claim child benefit and you could face several problems. You might have to fill in a self-assessment tax return in order to hand back part of your child benefit, or you could end up with a diminished state pension. But don’t assume the easiest option is simply not to claim the money instead. That too could have long-term consequences for your finances.

In January 2013 the government introduced the High Income Child Benefit Charge (HICBC). Anyone, or their partner, who gets child benefit and earns over £50,000 a year must hand back some of the money. Once you earn £50,000 a year child benefit is withdrawn at a rate of 1% for every £100 you earn over that threshold. So if you, or your partner, earn more than £60,000 you aren’t entitled to any child benefit at all.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free
https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up
Explore More
Ruth Jackson-Kirby

Ruth Jackson-Kirby is a freelance personal finance journalist with 17 years’ experience, writing about everything from savings accounts and credit cards to pensions, property and pet insurance.

Ruth started her career at MoneyWeek after graduating with an MA from the University of St Andrews, and she continues to contribute regular articles to our personal finance section. After leaving MoneyWeek she went on to become deputy editor of Moneywise before becoming a freelance journalist.

Ruth writes regularly for national publications including The Sunday Times, The Times, The Mail on Sunday and Good Housekeeping, among many other titles both online and offline.