The Trap
If you or your partner has an Adjusted Net Income over £60,000, you have to pay back 1% of your Child Benefit for every £200 you earn over that threshold.
Once your income hits £80,000, you have to pay back the entire amount. This acts as a high effective tax rate on income between £60k and £80k.
The Fix: Pension Contributions
The charge is based on your Adjusted Net Income, which is your total taxable income MINUS pension contributions (and Gift Aid donations).
Example Strategy
If you earn £65,000, you would normally pay back some Child Benefit.
However, if you contribute £5,000 (gross) into your pension, your Adjusted Net Income drops to £60,000.
Result: You keep ALL your Child Benefit AND you get tax relief on the pension contribution. It's a double win.
Calculate Your Position
Use our specific calculator to see exactly how much you might need to repay, or how much you could save.
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