Can paying into my pension help a new parent keep full Child Benefit in 2026/27?

Full answer

The HICBC claws back Child Benefit when the higher-earning partner's adjusted net income exceeds £60,000, rising to a full claw-back at £80,000 in 2026/27. Crucially, the charge is based on adjusted net income, not gross salary, and personal pension contributions reduce that figure. So directing money into a pension can cut or eliminate the charge while keeping your full Child Benefit. How it works depends on your pension type. With a relief-at-source scheme (most personal and SIPP arrangements), you grb up your gross contribution and deduct it from your income for the HICBC test. A £4,000 net contribution becomes £5,000 gross after 20% basic-rate relief is added, and that £5,000 reduces your adjusted net income. With a salary sacrifice or net-pay workplace scheme, your taxable pay is already reduced at source, so the lower figure on your payslip is what counts. Worked example: you earn £70,000, your partner has lower income, and you have one child. At £70,000 you would lose roughly half your Child Benefit. Make a £8,000 net personal pension contribution; it is grossed up to £10,000, bringing adjusted net income to £60,000. The HICBC disappears, you keep all your Child Benefit, and you also get higher-rate relief through your tax return on the contribution. Watch the £60,000 Annual Allowance for pensions and any tapering at very high incomes. This works the same across Scotland, Wales and Northern Ireland, as Child Benefit and the HICBC are UK-wide. Scottish taxpayers calculate income tax on Scottish bands, but the £60,000–£80,000 HICBC thresholds and adjusted-net-income mechanics are identical. Claim Child Benefit even if you expect the charge, as it protects your State Pension National Insurance credits.

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