See how pension contributions can reduce your adjusted net income and protect your Child Benefit.
Enter your details to see your Child Benefit position and what you could be missing out on.
The Child Benefit charge is based on the highest earner's adjusted net income.
If the highest earner in your household has an adjusted net income above £60,000, HMRC charges a tax called the High Income Child Benefit Charge (HICBC). It gradually claws back Child Benefit between £60,000 and £80,000 — above £80,000 it's fully withdrawn. Pension contributions reduce your adjusted net income, which can reduce or eliminate the charge.
Child Benefit is paid to one parent or guardian for children under 16 (or under 20 in approved education). From April 2024:
Include salary sacrifice contributions — these reduce your adjusted net income.
Salary sacrifice pension contributions reduce your adjusted net income — the figure HMRC uses to calculate both the High Income Child Benefit Charge and Tax-Free Childcare eligibility. Increasing contributions could reduce or eliminate the charge without losing the money — it goes into your pension instead.
Paid to registered providers — nursery, childminder, after-school clubs.
Tax-Free Childcare (TFC) is a separate government scheme. For every £8 you pay into a TFC account, the government adds £2 — up to £500 per child per quarter (£2,000/year per child). It applies to children under 11 in registered childcare.
Either parent earning over £100,000 makes the household ineligible. Pension contributions can reduce income below this threshold and restore entitlement.
TFC applies to children under 11. Used to calculate eligible children.
Here's how your household income compares to the thresholds and what you're currently entitled to.
From April 2024 the taper thresholds changed: the charge now starts at £60,000 (previously £50,000) and Child Benefit is fully withdrawn at £80,000 (previously £60,000). Between these figures, you lose 1% of the benefit for every £200 of income above £60,000.
Model how increasing pension contributions could reduce your adjusted net income and restore benefits.
If you think you could benefit from increasing pension contributions, speak to your employer's HR team about salary sacrifice, or consult a qualified financial adviser who can model your full tax position accurately.