Emergency Budget: Child tax credit threshold lowered

The emergency budget has unveiled a reduction to those who will be able to claim child tax credits.

 From next year, tax credits will rise in line with consumer price index rather than retail price index.

This could result in more than £6 billion of savings.

The threshold to claim child tax credits will be reduced to families who earn over £40,000 a year from next year.

Currently, parents can claim child tax credit if they earn up to £58,000, or £66,000 if the child is under the age of one.

Child benefit is also to be frozen for the next three years.

Chancellor of the Exchequer George Osborne also announced plans to give additional support to families in poverty, with the increase of the child element of the child tax credit by £150 above indexation next year - a £2 billion a year commitment to low income families.

Osborne said: "These are among the most vulnerable people in our society and they need our help."