Inflation-linked benefits are set to rise by 1.7% from April as the new tax year begins, giving claimants an extra dose of cash in their bank accounts. The uplift was announced by Chancellor Rachel Reeves in last year’s October Budget and will apply to some benefits issued by His Majesty’s Revenue and Customs (HMRC).
The National Minimum Wage is also due to rise from April by 6.7%, while the weekly earnings limit for Carer’s Allowance will rise to the equivalent of 16 hours a week at the National Living Wage, marking the largest increase since the allowance was introduced. The new payment rates come after Reeves today announced further welfare budget cuts in the Spring Statement, building on cuts to the disability and incapacity bill set out earlier this month, as well as steps to crack down on tax evasion which she said would raise £6.5 billion per year for the public purse. HMRC has confirmed the new benefit rates for 2025 to 2026, which will be paid at the following rates from April.
Child Benefit
Child Benefit payment rates will rise by 1.7% from April 7, in line with the Consumer Prices Index (CPI) measure of inflation for the year to September 2024.
The benefit is paid at two different rates – a higher payment for the eldest or only child, and a lower payment for any additional children. Currently, parents or carers can get £25.60 per week for the eldest or only child, which over the course of a year amounts to £1,331.20.
For each additional child, you can currently get an extra £16.95 per week, making the annual total for two children £2,212.60 per year, or £3,094 per year if you have three children.
But from April 7, these rates will increase by 1.7%, taking the eldest or only child payment up from £25.60 per week to £26.05, while the rate for any additional children will go up from £16.95 to £17.25.
It means that parents with one child can get £1,354.60 per year on the new rate, while parents with two children can get £2,251.60, and parents with three children can get £3,148.60.
Guardian’s Allowance
Guardian’s Allowance will also rise by 1.7% from April 1 and you can claim this if you’re responsible for bringing up a child whose parents have died. You may also be eligible if there’s one surviving parent.
Currently, the allowance rate is £21.75 per week and you can get this on top of Child Benefit. So over the course of a year it’s worth £1,131. From April 7, the rate will rise to £22.10 per week (an extra 35p) taking the annual rate up to £1,149.20 (an extra £18.20 per year).
Tax Credits
Tax credits will permanently end on April 5, 2025 and no more payments will be made after that. This applies to Working Tax Credit or Child Tax Credit. Instead, claimants will be sent a letter if you’re eligible for Universal Credit or Pension Credit.
