In a landmark move announced in the recent Budget, Chancellor Rachel Reeves has confirmed the abolition of the controversial two-child benefit cap. The policy, which has been a focal point of political debate, will be officially scrapped in April 2026.
What is the Two-Child Benefit Cap and Why is it Ending?
The two-child limit, introduced by the Conservative government in April 2017, restricts families from claiming Universal Credit or Tax Credits for a third or subsequent child. This meant that many larger families were denied crucial financial support.
Chancellor Reeves defended the decision in the Commons, stating, "We on this side of the House do not believe that the solution to a broken welfare system is to punish the most vulnerable children." The move signals a significant shift in social security policy, aiming to provide a fairer system for families across the UK.
The Tangible Impact: Lifting Children Out of Poverty
The financial and social implications of this decision are substantial. According to the Office for Budget Responsibility (OBR):
- Removing the cap will increase benefits for approximately 560,000 families.
- The average financial gain for these families will be around £5,310 per year.
- Most importantly, it is projected to lift 450,000 children out of poverty by 2029/30.
The OBR also estimates the total cost of scrapping the policy will reach £3 billion by the end of the decade. For context, Universal Credit claimants currently receive extra monthly payments for their children, which continue until the child turns 16, or 19 if they remain in full-time education.
Campaigners and Experts Hail a 'Serious Step Towards Fairness'
The announcement has been met with widespread approval from child poverty campaigners and policy experts. Chris Sherwood, CEO at the NSPCC, welcomed the move, highlighting the real-world impact on children's lives.
"Through Childline, we hear about children and young people not being able to afford food or school essentials, worrying about judgement from others and agonising over the wider impact on their family," he said. He urged the government to build on this decision with a comprehensive child poverty strategy.
Professor Ashwin Kumar, a former advisor to Gordon Brown and director of research at IPPR, called the abolition "targeted, sensible and fair." He stated, "For too long, children have been punished for the so-called sins of their parents. The policy was both ineffective and unjust. Ending the two-child limit is a serious step towards restoring fairness, opportunity and dignity for families across the country."
This policy reversal marks a pivotal moment for family support in the UK, directly addressing one of the key drivers of child poverty and altering the financial future for hundreds of thousands of households.
