The British government has scrapped the controversial two-child benefits limit from April 2026, a policy change confirmed by the Office for Budget Responsibility (OBR) in documents released before Chancellor Rachel Reeves delivered her Budget on Wednesday.
The removal of the cap will cost £2.3 billion in 2026-27, rising to £3 billion in 2029-30. The OBR estimates the change will reduce child poverty by 450,000 children by 2029-30 relative to the level had the limit remained in place. Around 560,000 families are expected to receive an average annual increase of £5,310 by 2029-30.
Policy background
The two-child limit was first announced by the Conservatives in 2015 and came into effect in 2017. It restricted child tax credit and universal credit to the first two children in most households, affecting families with third or subsequent children born after April 6, 2017. The universal credit child element is currently £3,500 per year for second and subsequent children.
The government had faced mounting pressure from anti-poverty campaigners and many of its own Labour MPs to end the policy. Organisations working in the sector argued 109 children across the UK were pulled into poverty by the policy every day. Both Reeves and Prime Minister Sir Keir Starmer had hinted in the lead-up to the Budget that the cap could go.
Organisations welcome decision
Unicef UK called it a "major, necessary decision to tackle record levels of child poverty in the UK", adding: "No child should be punished for the number of siblings they have."
Helen Barnard, director of policy at foodbank network Trussell, described it as a "bold step which will protect hundreds of thousands of children from growing up facing hunger and hardship". She said the Chancellor had "listened to the families and foodbanks across the UK who have been imploring her to act".
Action for Children said the move "marks a turning point for struggling families" and is "long overdue and a vital first step towards ending child poverty".
Current poverty levels
The latest government data, published earlier this year, estimated the number of children living in poverty in the UK reached a record high of 4.45 million children in the year to March 2024. The government has said it will publish its wider child poverty strategy this autumn, having been delayed from an initial deadline of spring.
Note: This article was created with Artificial Intelligence (AI).
