Was the Chancellor’s Spring Statement good news for families?

Family lawyer Linda Pope explains the impact of the Chancellor’s Spring Statement 2024 on families.

Child Benefit

As expected, there were significant changes to child benefit. More parents will be paid child benefit after the £60,000 threshold (otherwise known as the High-Income Child Benefit Charge), beyond which no payment is currently made, will be extended to £80,000 from April. The government estimates that nearly 500,000 families would be better off by an average of £1,260 in the year from April. For some the benefit will be bigger, up to £2,212 a year for some parents with two children. . The policy change is predicted to help families with children in full-time education. Also due to change is the way in which families qualify for the benefit, although that won’t take effect until April 2026.

This is because under the tax charge,  introduced in 2013, child benefit received by those earning more than £50,000 a year and considered high earners was clawed back via the tax system on a sliding scale. However, in yesterday’s budget announcement the Chancellor conceded that the tax penalty affecting many higher-earning parents worked in an unfair way and led to some paying a marginal tax rate of 64%.

The Household Support Fund

The Household Support Fund, which helps anyone struggling to pay for essentials, has also been extended for another six months. It remains to be seen what, if anything, will take its place.

Early Years provision 

Notably there was no indication of investment in social security and although, the chancellor provided some relief for nurseries and preschools providing 30 hours of “free” childcare for eligible under-5s by September 2025.

There was no increase in the amount the government gives to providers to care for three and four-year-olds, which some argue does not cover costs and  leading to nursery closures in the early years sector supporting vulnerable children. This seems rather short sighted when most studies show early years education provides the foundation for wider learning and better educational success, particularly for children who are already at a socio-economic disadvantage.

National Insurance

The Chancellor announced a 2p cut in the rate of National insurance which was not good news for all families. Middle earners on between £26,000 and £60,000 will see their personal tax bills fall, while lower and higher-earning taxpayers (ie those earning over £61K) will see their taxes rise.

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The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. The law may have changed since this article was published. Readers should not act on the basis of the information included and should take appropriate professional advice upon their own particular circumstances.