Why You Should Claim Child Benefit

Anyone who has caring responsibilities for a child under the age of 16, or under 20 and who is still in approved full time education or training, can claim Child Benefit. You don’t even need to be the child’s biological or formal adoptive parent, just be responsible for looking after them.

The benefit, in and of itself, isn’t really going to move the needle. For tax year 2026/27 Child Benefit payments amount to £27.05 per week (£1,406.60 per year) in respect of an eldest child, and £17.90 a week (£930.80 per year) for every child thereafter. But every little helps I suppose.

There isn’t a limit either on the amount of children that the benefit can be claimed for so…have at it I guess.

It is important to note however that while Child Benefit isn’t technically means tested, it is effectively “by the back door”. Any family where one of the couple earn more than £60,000 of “adjusted net income" will have to repay some or all of the Child Benefit they receive.

This clawback is unimaginatively named the “High Income Child Benefit Charge” and will either be calculated and claimed back by HMRC through the Self Assessment process, or as of recently, through automatic deduction from your pay cheque via the PAYE system.

The “High Income Child Benefit Charge” operates on a sliding scale, with 1% of the benefit lost per £200 of “adjusted net income” over £60,000. What this means is that if one of the relevant couple earns more than £80,000 in a year, any Child Benefit received will need to be repaid in full.

This, I would imagine, will catch a lot of you. So you might reasonably be thinking “why would I claim a benefit that I know our family is going to have to repay?”

And it is a reasonable question. The answer lies in what claiming Child Benefit triggers elsewhere in our tax system.

Any individual who successfully claims Child Benefit and who is caring for a child under 12, will automatically receive a Class 3 National Insurance (NI) contribution for that tax year. This matters because our National Insurance record is what is used to determine our personal entitlement to the State Pension.

So let’s say we have a couple, one of whom earns £100,000 a year and the other has full time responsibility for looking after their new born. If the carer applies for Child Benefit and is successful, they will receive a year’s worth of State Pension (currently worth approximately £358 a year of inflation linked income from the age of 67) at zero cost.

Multiply this figure by 12 for all of the years this individual can claim for, and it sure does move the needle in retirement.

Our fictional couple of course fall foul of the “clawback” as the working partner earns more than £60k a year - however, when claiming Child Benefit there is an option on the relevant form to ask not to receive any payments, just to receive the Class 3 NI contribution.

The NI contribution is received by the individual making the claim, so it is super important that the claim is made in the name of the individual who isn’t working. This is because the “working partner” will receive a State Pension contribution automatically through their day job - so claiming in their name would be a waste of time.

Sounds great, how can I claim?

There are three options:

1. Claim via the HMRC app;

2. Go to gov.uk/child-benefit and start your application there; or

3. Fill in a form CH2 if you cannot apply online.

Bugger, I should have been claiming for this but haven’t been…

Fear not! The government announced in April 2023 that it would introduce a new system allowing affected parents and carers to claim backdated National Insurance credits they had not previously claimed for free.

It had been due to launch in April 2026, but it has now been delayed to April 2027. So keep an eye out.

If you are due to receive State Pension before then, and think you are short of a few years you shouldn’t be, I would contact HMRC directly.

None of the above is intended to represent advice to any individual. If you have any questions regarding your specific situation please feel free to contact me at david@beechgrovefinancialplanning.co.uk, or contact another regulated financial adviser.