Changes to the Child Benefit system, previously labelled “unfair” by Martin Lewis, have been announced by Chancellor Jeremy Hunt.

In his Budget, Mr Hunt announced that changes would be made to Child Benefit rules which penalise single income families.

The high-income child benefit charge threshold will be raised from £50,000 to £60,000 and the taper will extend up to £80,000, Chancellor Jeremy Hunt has said.

Chancellor Jeremy Hunt said child benefit is withdrawn when one parent earns more than £50,000 a year, saying: “That means two parents earning £49,000 a year receive the benefit in full but a household earning a lot less than that does not if just one parent earns over £50,000.

“Today I set out plans to end that unfairness. Doing so requires significant reform to the tax system including allowing HMRC to collect household level information.

“We will therefore consult on moving the high-income child benefit charge to a household-based system to be introduced by April 2026.

“But because that is not a quick fix, I make two changes today to make the current system fairer.”

He explained: “I confirm that from this April the high-income child benefit charge threshold will be raised from £50,000 to £60,000. We will raise the top of the taper at which it is withdrawn to £80,000.

“That means no one earning under £60,000 will pay the charge, taking 170,000 families out of paying it altogether. And because of the higher taper and threshold, nearly half a million families with children will save an average of around £1,300 next year.”

It was a topic area which Martin Lewis campaigned about in the lead-up to the Budget.

In an open letter to the Chancellor published in January, the Money Saving Expert said: “This was by far the biggest single topic the public asked me to raise with you. In our interview, I read a question from Alan which highlights the unfairness in the way Child Benefit gains start being withdrawn spending solely on one parent/guardian’s income hitting £50,000 (and wiped at £60,000).”

The question from Alan said: “My son’s partner tragically died 34 days after giving birth to twins. My son has taken a new job that now pays him £60,000 and is struggling with the cost of living and mortgage repayments after loss of a second income.

“HMRC has asked him to repay the Child Benefit. This seems grossly unfair that a couple can bring in nearly £100,000 but a single breadwinner loses out once they earn more than half of this. Are there any plans to change this?”

Continuing, the Money Saving Expert said: “I can see a few people arguing that it is right that Alan’s son’s family should lose their child benefit even though their total family income is lower. I was very pleased that you accepted there is an ‘unfairness’ in the structure that penalises single-parent families, single-earner families, and families where there is one dominant earner.

“While I agree, as you point out, that there are many structurally problems in the tax system, this one is exacerbated by the face the £50,000 (and £60,000) thresholds have been frozen since 2013 – which fiscally drags 100,000s more families into this situation each year. I’m sure it would be very popular measure if it were addressed in the budget.”

National Insurance contribution cut

Elsewhere in the Budget, the Chancellor announced another cut to National Insurance contributions.

He told MPs in his Budget that the rate of national insurance for workers earning between £12,570 and £50,270 would reduce from 10 per cent to 8 per cent.

The change could save the average worker £450 a year, adding up to £900 when combined with last year’s move.

Mr Hunt told MPs: “Because of the progress we’ve made because we are delivering on the Prime Minister’s economic priorities we can now help families with permanent cuts in taxation.

“We do this not just to give help where it is needed in challenging times. But because Conservatives know lower tax means higher growth. And higher growth means more opportunity and more prosperity.”

Experts have said that a 2p reduction in national insurance contributions would not by itself be enough to stop the tax burden reaching record levels by the end of this decade.

The Institute for Fiscal Studies said the measure would not prevent taxes rising to about 37% of GDP by 2028-29.

The Resolution Foundation think tank said the biggest net beneficiaries of the national insurance cut, combined with threshold freezes, are those earning £50,000, while those earning £19,000 or less will actually be worse off.