What are the Two Child Limit and Benefit Cap, and did they increase child poverty?

The Two Child Limit prevents parents from claiming universal credit payments for their third or any later children. It applies to children born after April 2017. Conservative Chancellor George Osborne introduced the limit as part of the former government’s drive to cut spending.

It was originally sold to discourage parents already receiving benefits from having more children. However, data shows that the limit has significantly increased the number of children in the UK living in poverty. One in three children are affected in some of the poorest areas of the country.

The Benefit Cap places a limit on the total amount in benefits a family can receive, no matter how big the family is or the cost of housing in their area. It mainly affects families with children, and mostly single parents with very young children.

Families affected by the Benefit Cap are also more likely to be living in deeper poverty.

Recently, the Scottish government unveiled new plans to end the impact of the two-child benefits cap. From Monday 2 March 2026, the government will introduce a Two-Child Limit Payment. This will allow affected families in Scotland to receive payments and aim to reduce poverty. Applications are expected to open in March 2026.

The two-child benefit cap is now affecting 1.6 million households across the UK, with one in nine children affected. At the same time, the Benefit Cap pushes families deeper into hardship and makes it harder to escape poverty.

A lot of the conversation around the Two Child Limit focuses on the simplistic idea that people should not have more children than they can ‘afford’. This is both cruel and, in many cases, irrelevant.

Six in ten households affected by the two-child limit are in work. And family circumstances can change overnight. Parents might fall ill or might separate. A third child may have a disability, which affects a parent’s ability to work. In these cases, the Two Child Limit can make a difficult situation even worse.

We supported Tom and Kerry when the birth of their third child left Kerry in chronic pain, unable to work properly and experiencing seizures.

Tom had to give up work to care for Kerry and the children. Having to rely on benefits forced them to leave their privately rented house, and give up their car. Action for Children was able to support the family with £250 towards a new washing machine, energy vouchers, and referral to the local food bank.

It’s important to remember that, for families, the Two Child Limit affects all the children, not just the youngest one or two. For children in a family whose parents are trying to make money for two children stretch to cover a third, that means a less happy childhood for all.

Fewer treats, toys, and trips out. Less money to keep the fridge full, or the bailiffs at bay. Poverty affects those who experience it in lots of ways – including their mental health.

The UK government has announced that the two-child limit will be scrapped in full as part of its upcoming Child Poverty Strategy.

This will lift 350,000 children out of poverty overnight, and keep half a million free from poverty by the end of the decade.

Nearly half (49%) of children living in poverty are in families with more than two children.

We have been campaigning for the Labour government to remove the two-child limit and benefit cap as part of our Paying the Price campaign.

Scrapping the two-child limit will mean fewer children growing up in cold homes without enough food to eat, warm clothes to wear or a bed to sleep in.

Our campaign, 'Paying the Price' is highlighting how children are paying the price for a lack of action on poverty. They're spending their childhoods feeling anxious, ashamed, and isolated by poverty. The government needs to step up to invest in real change.