Chancellor Rachel Reeves has indicated the government may scrap the controversial two-child benefit limit in the upcoming Budget, a move that could lift an estimated 630,000 children out of poverty.
Family Finances Stretched to Breaking Point
The policy, originally introduced by the Conservatives, restricts Universal Credit payments to the first two children in a family. Its potential abolition comes as families across the UK describe being crushed by the rising cost of living, soaring childcare expenses, and increasing rents.
Chloe Crichton, a 25-year-old mother from Cleveland, knows this struggle all too well. Despite receiving government support for all three of her children—a five-year-old son and three-year-old twin girls—the financial strain became unbearable. "Being a parent is wonderful, but the costs can be overwhelming," she explains.
The young family was forced to move back in with Chloe's mother for nearly a year after their finances became too stretched. "We stopped going out for dinners, we didn't go on any family days out, and we saved money wherever we could, but we were still struggling," Chloe recounts. Her partner Ethan, 26, works as a sales assistant, but after paying rent and bills, there was little left for essentials.
The Crushing Reality for Parents
Chloe's situation is far from unique. Research from MoneySuperMarket's Household Money Index reveals that parents with children under three spend 76% of their income every month on bills and essential outgoings. They have approximately £200 less in disposable income than the average person.
The financial pressure is compounded by a 23% increase in school and childcare costs since September 2024. For Chloe, returning to her job as a mental health support worker was impossible. "The nursery fees would be more than my monthly salary," she states, highlighting a common dilemma for many parents.
Her family's weekly food shop for five now costs around £100, and she notes that "it feels like things have become a lot more expensive for parents in the past few years."
Billions in Unclaimed Support
Despite the widespread financial hardship, around seven million families are missing out on government benefits to which they are entitled. Kara Gammell, a personal finance expert at MoneySuperMarket, advises that simple switches could provide significant relief.
"Switching to a fixed energy deal could save households up to £295, and broadband customers can save up to £172 annually by shopping around," she suggests.
Many households could be eligible for unclaimed support including:
- Child Benefit
- Carer's Allowance
- Personal Independence Payment
- Disability Living Allowance
- Housing Benefit and Council Tax support
- Pension Credit
- Attendance Allowance
Hundreds of thousands are also missing out on Pension Credit, while over a million are not claiming Attendance Allowance. Some may even qualify for a free TV licence.
As Chloe Crichton concludes, "We need more support for families who are struggling - whether that's help with everyday costs or in decision-making that leads to lower costs." With the Budget announcement imminent, many hope the proposed policy change will mark the beginning of that crucial support.
