Child benefit cut 'to hit 680,000'

Coins in handAround 680,000 families will lose out if child benefit is cut for high-rate taxpayers, with almost one in four involving a household with one parent earning a salary, according to a new study.

Finance firm NFU Mutual said that if the Government goes ahead with the move, every household with a higher-rate taxpayer will be hit from April 2013, losing two-child families £1,750 a year.

Sean McCann, personal finance specialist at NFU Mutual, said: "We're still waiting for the Chancellor to show his hand on this issue but we know that change to the child benefit system is coming for families paying 40% income tax.

"Losing child benefit payments could make a big dent in many household incomes, but for many parents, putting a little more into the pension in order to bring down earnings below the higher-rate threshold could help to make the most of their income.

"The tax efficiency of pension contributions could be key to these families from April 2013. Whatever the outcome, it's vital that all parents start making the most of the tax planning opportunities available to them."
© 2012 Press Association

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