According to a new report, changes to the benefit could affect those who earn less than £50,000, for example £35,000 per year, but also have income from other sources like rental income or investment income.

If all of these total £50,000+, the changes will affect the individual’s child benefit status.

This is because the changes include not just earnings, but also adjusted net income from other sources.

It’s also important for people to remember that bonuses and benefits in kind, like a car allowance, count too.

An individual may have a low base salary, but have a good bonus and benefits in kind and therefore is likely to be affected.

Matthew Stephens, from Prudential, said: “The rules on child benefit give some potentially eye-watering marginal tax rates. For every £100 of income earned between £50,000 and £60,000, 1% of child benefit is lost.

“For someone who has one child, the annual child benefit is £1,056, meaning that £10.56 is lost for every £100 of income above £50,000. This means an effective rate of income of 50.56% on each £100 of income over £50,000.

“The rate increases in line with the more children you have. For four children, it is 71.46%. The good news is that this could effectively be reclaimed by making pension contributions.”

Stephens suggests that someone earning between £50,000 and £60,000 with four children could pay £100 extra into a pension and get 71.46% marginal tax relief – a net cost to the individual of £28.54.

Stephens said: “Add to that the fact that at retirement, a quarter of the pension can be taken as a tax-free lump sum – £25 for every £100 – and the total cost reduces even further.”