Recent data from HMRC reveals that 214,000 parents in the UK are eligible for Child Benefit but have not claimed it, an increase of 66,000 over the past five years. This figure highlights a significant gap in awareness or action, as many families continue to miss out on financial support that could assist in their daily lives. Child Benefit provides valuable financial assistance, yet its full benefits extend beyond just immediate cash payments.
Various advantages, including long-term national insurance credits and pension contributions, make this benefit particularly important for families. Independent reports have highlighted the growing number of eligible parents who are still not claiming this support.
Understanding the Child Benefit Payment
The Child Benefit offers £26.05 per week for the first child, which equals £1,354 per year. For each additional child, the payment drops to £17.25 per week, or £897 per year. Notably, the child allowance is not means-tested, so it can be claimed regardless of a parent’s income. However, for families where one parent earns above £60,000, the benefit is subject to the high-income child benefit charge.
If a parent earns £80,000, the full amount of Child Benefit is effectively lost due to this charge. The amount is withdrawn at a rate of 1% for every £200 earned above the £60,000 threshold. While this may discourage some from claiming, it is still worth considering the long-term financial benefits that can result from receiving the payments.
National Insurance Credits and Long-Term Benefits
Claiming the benefit comes with an additional advantage: National Insurance credits. Parents who claim Child Benefit for children under the age of 12 automatically receive these credits, which count towards their state pension. These credits help reduce the number of years needed to qualify for the full state pension, which can be incredibly valuable for parents taking time off work to care for their children.
For example, missing out on Child Benefit could mean a loss of £342.16 annually in state pension payments. This amount is tied to the National Insurance contributions a parent would otherwise have made while working.
However, by claiming the benefit, parents can ensure they still receive the necessary credits to increase their pension entitlement. Even parents who opt out of receiving the cash benefit due to the high-income charge can still claim the National Insurance credits associated with Child Benefit.
HMRC’s Efforts to Increase Awareness
An HMRC spokesperson said:
Around 7 million families are getting a financial boost from Child Benefit and we’re constantly promoting its benefits through a range of channels and partnerships so that more families claim what they’re entitled to.
Despite the high-income charge for some parents, HMRC continues to encourage all eligible families to claim the benefit, as the long-term financial advantages can significantly impact their future.
