For families already juggling childcare, rent, and rising grocery bills, even small changes to benefits can have a big impact. In 2025, updates to Child Benefit and Tax Credits are reshaping how support reaches households — bringing clarity for some, and new decisions for others.
Here’s a clear, up-to-date look at what’s changing, what’s staying the same, and how families may be affected.
Child Benefit: What’s Changed in 2025
Child Benefit continues to be paid to millions of families and remains one of the most widely used forms of support for children.
Key updates this year include:
- Annual rate uplift applied from April 2025
- Continued payment for children under 16 (or under 20 in approved education or training)
- No change to how payments are made — usually every four weeks
- Ongoing application of the High Income Child Benefit Charge (HICBC) for higher earners
The uplift offers modest extra support, but many families say it is quickly absorbed by higher everyday costs.
High Income Child Benefit Charge: Still a Key Issue
The High Income Child Benefit Charge remains in place in 2025 and continues to affect households where one earner’s income exceeds the threshold.
What families should remember:
- The charge is based on individual income, not household income
- Some higher earners still choose to receive Child Benefit and repay part or all of it through tax
- Others opt out of payments to avoid the charge while protecting National Insurance credits
Tax advisers say misunderstanding the charge remains one of the most common issues facing parents.
Tax Credits: A System Being Phased Out
Tax Credits — including Working Tax Credit and Child Tax Credit — are now firmly classed as legacy benefits.
In 2025:
- No new claims for Tax Credits are accepted
- Existing claimants are gradually being moved to Universal Credit
- Transitional protection may apply for some households to prevent sudden income loss
This transition represents one of the biggest changes to family support in recent years.
Universal Credit and Families
As Tax Credits are phased out, Universal Credit has become the main form of income-related support for families.
Key points for parents:
- Child elements are included within Universal Credit
- Childcare costs can be supported, within limits
- Monthly payments require careful budgeting
- Changes in earnings or childcare must be reported promptly
Some families benefit from the new structure, while others find the monthly cycle challenging.
Real Stories from Families
Sarah, a single parent of two, recently moved from Tax Credits to Universal Credit.
“The payment amount stayed similar, but the timing changed everything. Monthly budgeting took some getting used to.”
Mark and Helen, both working parents, rely on Child Benefit despite the tax charge.
“We keep it for the NI credits. It still makes sense for us, even if we pay some back.”
Government Position
Officials from HM Revenue & Customs and the Department for Work and Pensions say the changes are about simplifying support and targeting help more effectively.
A spokesperson noted that moving families onto Universal Credit is intended to create a single, streamlined system — though they acknowledge transitions can be difficult.
Expert Insight
Welfare advisers say the biggest risks for families are:
- Missing migration notices from Tax Credits
- Underestimating the impact of monthly payments
- Failing to report income changes quickly
Experts stress that preparation and understanding entitlements early can prevent sudden gaps in income.
What Has Not Changed
To avoid confusion:
- Child Benefit has not been abolished
- Tax Credits are not reopening to new claims
- Child elements still exist within Universal Credit
- Eligibility for Child Benefit remains universal, regardless of employment status
- Child Benefit still counts toward National Insurance credits
The system is evolving — not disappearing.
What Families Should Know Now
- Check whether you’re still on Tax Credits or Universal Credit
- Understand how income affects Child Benefit through the tax charge
- Plan for monthly budgeting if moving to Universal Credit
- Keep records of childcare costs and earnings
- Seek advice early if unsure about a change notice
Staying informed is the best protection against unexpected income changes.
Common Questions About Child Benefit & Tax Credits
1. Is Child Benefit still paid in 2025?
Yes.
2. Has Child Benefit increased this year?
Yes, with an annual uplift.
3. Are Tax Credits ending?
They are being phased out and replaced by Universal Credit.
4. Can I make a new Tax Credit claim?
No.
5. Does Universal Credit include help for children?
Yes.
6. Is Child Benefit means-tested?
No, but higher earnners face a tax charge.
7. Should higher earners still claim Child Benefit?
It depends on individual circumstances.
8. Will moving to Universal Credit affect my income?
It can — transitional protection may apply.
9. Do I need to act if I receive a migration notice?
Yes, within the stated timeframe.
10. Does Child Benefit affect Universal Credit?
It is treated separately.
Bottom Line
UK Child Benefit remains in place in 2025, while Tax Credits continue their phased exit in favour of Universal Credit. For families, the biggest changes are about how support is delivered rather than whether it exists. Understanding the new structure — and acting early when notified — can make the difference between stability and disruption.
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