HMRC and the DWP have confirmed the new payments
The Department for Work and Pensions (DWP) has confirmed proposed new payment rates from April for the State Pension and benefits including Personal Independence Payment (PIP), Attendance Allowance, Universal Credit and Carer’s Allowance. HM Revenue and Customs (HMRC) has also confirmed the annual uprating for Child Benefit and Guardian’s Allowance.
Child Benefit and Guardian’s Allowance payments will rise in line with the Consumer Price Index (CPI) for the year to September 2025, which stands at 3.8 per cent. This means that, from April 2026, the Child Benefit rate for the eldest child will climb from £26.05 to £27.05 per week, whilst the rate for additional children will increase from £17.25 to £17.90 per week. Guardian’s Allowance will rise from £22.10 to £22.95 per week, reports the Daily Record.
As the payments are typically paid every four weeks, this amounts to:
- Child Benefit, eldest child – £108.20
- Child Benefit, additional children – £71.60
- Guardian’s Allowance – £91.80
Tax-Free Childcare
Working families are also being urged to register for Tax-Free Childcare to assist with the approaching school holidays over the festive period.
Settling childcare bills through a Tax-Free Childcare account can save working families up to £2,000 per year for each of their children up to the age of 11 or £4,000 per year up to the age of 16 if the child is disabled. Parents can utilise the scheme to contribute towards approved childcare costs, whether that’s nursery provision for younger children, or for older youngsters – wraparound or after-school care clubs during term time, or holiday clubs for the lengthy summer break ahead.
In June, the UK Government distributed a total of £57.7 million in top-ups to Tax-Free Childcare accounts, meaning each family received, on average, more than £100 to put towards their childcare expenses.
Tax-Free Childcare explained
For every £8 paid into a Tax-Free Childcare account, the UK Government adds £2, which means parents can receive up to £500 (or £1,000 if their child is disabled) every three months to help cover their childcare costs.
Once families have set up a Tax-Free Childcare account, they can deposit funds and use them immediately or keep them in the account to access whenever required. Any unused funds in the account can be withdrawn at any time.
HMRC stated it takes just 20 minutes to apply online for a Tax-Free Childcare account.
After an account is opened, parents can deposit funds and use them immediately or keep them in the account to access whenever required. Any unused funds in the account can be withdrawn at any time.
Eligibility for Tax-Free Childcare
Families could qualify for Tax-Free Childcare if they:
- Have a child or children aged 11 or under. They stop being eligible on September 1 after their 11th birthday. If their child has a disability, they may get up to £4,000 a year until September 1 after their 16th birthday
- Earn, or expect to earn, at least the National Minimum Wage or Living Wage for 16 hours a week, on average
- Each earn no more than £100,000 per annum
- Do not receive Universal Credit or childcare vouchers
A full list of the eligibility criteria is available on GOV.UK here.
