What Will Budget 2024 Bring for Families?
Are you a parent eagerly awaiting the new Labour budget? After nearly 15 years, the Labour government is stepping back into the budget spotlight, with families across the UK watching closely for changes that could relieve the pressure of rising living costs, particularly around child benefit, free nursery hours, and Universal Credit adjustments.
From juggling escalating nursery fees to managing increased food and fuel costs, parents, especially those on lower incomes, are seeking changes that might finally ease some of the financial burdens. So, what relief could tomorrow’s budget hold?
Child Benefit Cap: Time for Reform?
The current child benefit structure has received criticism for creating inequities among households, particularly those with a single high-earner. Right now, if two parents each earn slightly below the threshold, they can claim the full child benefit. But if one parent exceeds the threshold, even marginally, they’re required to pay back a portion through the high-income child benefit charge.
Labour increased the threshold last year, moving from £50,000 to £60,000, with benefits tapering until an individual reaches £80,000. This adjustment means a household with two parents each earning £60,000 can claim full benefits, while a single-parent household earning just over £60,000 would see their benefit reduced.
Many are hopeful the system will be updated to evaluate household income rather than individual earnings, enabling a more equitable distribution of benefits to middle-income families who need it most.
Expanding 30 Free Nursery Hours – But Who Qualifies?
Starting in September 2025, working parents in England with children as young as nine months will be eligible for 30 hours of free childcare weekly, with £1.8 billion earmarked to support the initiative. However, there’s a catch: any parent who earns above £100,000 will lose half of these free childcare hours for their three and four-year-olds.
As with child benefit, families and experts alike are calling for this cap to be determined by household, not individual income. The shift could better support dual-income families where one partner’s income might slightly exceed the threshold.
Nursery schemes vary across the UK. While Scotland offers all three and four-year-olds 30 hours during term time, in Wales, only parents earning under £100,000 qualify for similar support. Each region has nuanced guidelines, leaving parents grappling with eligibility requirements and limitations.
Universal Credit: Capping Deductions for Families
Labour is reportedly considering reducing the cap on benefit deductions, allowing families to retain more of their income. This change would benefit up to 1.2 million households, including approximately 700,000 families with children. Labour’s proposal to introduce the Fair Repayment Rate could limit deductions to 15%, down from the current 25%, potentially restoring as much as £420 a year to some of the country’s most vulnerable families.
Schools and Community Support
For families, schools are more than educational institutions—they’re community hubs. This budget is anticipated to address longstanding funding gaps with a £1.4 billion investment in rebuilding deteriorating schools. Additionally, the government is expected to triple funding for free breakfast clubs, increasing spending to over £30 million annually.
Many are eager to see how the budget will address pressing issues such as special educational needs and disabilities (SEND) support, extra teaching assistants, and potentially new initiatives to combat food insecurity amongst school-age children.
Case Study: The Smith Family
Meet the Smith family: a two-parent household with two children, struggling under the weight of current child benefit restrictions. With one parent earning £61,000 and the other earning £28,000, they fall into a unique income bracket where they lose out on full child benefit. They pay significantly more than they would if each parent earned just under £60,000.
The Smiths also face high childcare costs, as the £100,000 individual cap means they lose out on free childcare hours for their younger child. Under a household cap, they would qualify for 30 hours free per week, significantly reducing their nursery fees. They also hope to benefit from Labour’s proposed Universal Credit changes, which could reduce deductions on the benefits they currently receive to support their children’s schooling and activities.
“Budget 2024 isn’t just about balancing books; it’s about giving families breathing room and ensuring every child, regardless of postcode or parents’ pay cheque, has access to essential services.”