Alfred Hawthorne Hill was born on 21 January 1924 in Southampton on the south coast of England. His father, Alfred Hill (1893–1972) (later manager of a surgical appliance shop that mostly sold condoms), and grandfather, Henry Hill (born 1871), had both been circus clowns. His mother was Helen née Cave (1894–1976). After leaving Taunton's School in Southampton, Hill worked at Woolworths and as a milkman, a bridge operator, a driver, and a drummer before becoming assistant stage manager with a touring revue. He was called up in 1942 and trained as a mechanic in the British Army. He served as a mechanic, truck driver, and searchlight operator in Normandy after September 1944 and later transferred to the Combined Services Entertainment division before the end of the war.

Inspired by the "star comedians" of British music hall shows, Hill set out to make his mark in show business. He changed his name to "Benny" in homage to his favourite comedian, Jack Benny.