UK (Parliament Politics Magazine) – Chancellor Rachel Reeves will lift the two-child benefit cap in November’s budget, aiming to cut child poverty for 1.7 million UK children.
As reported by The Guardian, Rachel Reeves confirmed plans to scrap the two-child benefit cap in the upcoming budget, with officials considering a tapered system to manage costs.
Rachel Reeves and Keir Starmer’s views on child benefits
Rachel Reeves and Prime Minister Keir Starmer said the budget will address the child poverty taskforce’s recommendations, with lifting the two-child benefit cap seen as a major step to reduce poverty for hundreds of thousands of children.
Officials warn that lifting the cap could lead to significant extra payouts for families with six or more children.
The Treasury is considering limiting additional benefits to three or four children, reducing amounts for subsequent children, with a possible taper system.
Another possible option is to lift the cap only for working parents, aiming to encourage more people into employment.
Government insiders said they believe Ms Reeves to take action in November’s budget, adding,
“If we’re going to do it, we have to lift the cap, not just language.”
Child poverty campaigners warn that failing to fully lift the cap could harm certain communities and draw criticism.
At the Labour conference in Liverpool, Mr Starmer hinted that the government will take further steps on child poverty, adding free school meals for universal credit recipients as the “first step.”
The prime minister added,
“We have walked that road before, and we will walk that road again, because a Britain where no child is hungry, when no child is held back by poverty, that’s a Britain built for all.”
The Labour leader has indicated he wants to scrap the two-child limit on tax and universal credits.
Previously, Ms Reeves said she expects to act on the child poverty taskforce findings in November.
She added,
“I’m a Labour chancellor and I want to reduce child poverty. I don’t want to see children growing up in poverty in Britain. Of course I don’t. We’ve got the child poverty taskforce report coming out shortly and we’ll respond to that at the budget.”
What did Save the Children say about lifting the two-child benefit cap?
Dan Paskins, director of UK impact at Save the Children, stated,
“We agree with the prime minister that action they have taken so far on child poverty is the ‘first step’. The only logical next move is to scrap the two-child limit to benefits in full at the autumn budget. Time is ticking for Britain’s children.”
How will the UK fund scrapping the two-child benefit cap?
Government figures show 1.7 million children faced the two-child benefit cap, with scrapping it set to cost £3.5bn annually. Ex-PM Gordon Brown, calling the two-child cap “cruel,” proposed higher gambling taxes to fund its removal.
Treasury insiders added that extra gambling tax revenue is baked into efforts to plug a £30bn hole in public finances.
What did Kemi Badenoch say about the two-child benefit cap?
Referring to the two-child benefit cap, Conservative leader Kemi Badenoch posted on X,
“If you’re on benefits, you should make the same responsible choices about having children as everyone else. We must keep the two-child benefit cap.”
She added,
“Labour and Reform want to scrap it. Only Conservatives are serious about living within our means.”
If you’re on benefits, you should make the same responsible choices about having children as everyone else.
— Kemi Badenoch (@KemiBadenoch) August 18, 2025
We must keep the two-child benefit cap.
Labour and Reform want to scrap it.
Only Conservatives are serious about living within our means. pic.twitter.com/FYSzFSgGiB
What did education unions urge the government on the two-child cap?
The National Governance Association, the National Association of Head Teachers, the Association of School and College Leaders, the National Education Union, NASUWT, and Unison warned in the letter of the “critical need” to lift the scheme.
The letter states,
“As school leaders, headteachers, governors, teachers and support staff working in schools and academies across England, we are writing to you about the forthcoming government child poverty strategy and the critical need for it to fully scrap the two-child limit policy. This poverty producing policy is harming the lives of hundreds of thousands of children and young people in our classrooms, and we are calling on government to put an end to this this autumn.”
The unions wrote,
“No child deserves to live in poverty, full stop. But the educational impact of the poverty that continues to rip through our communities and schools cannot be overstated. Poverty is having an adverse impact on children’s ability to learn, with children living in low-income households doing worse on average than their peers at every milestone, and it is making it increasingly hard for educators to carry out their core roles, with 79% of school staff in all roles reporting this.”
It added,
“The government cannot claim an ambitious child poverty strategy while any part of this policy remains in place. We work tirelessly every day to protect children from the harms of poverty, but we come together on behalf of the teachers, school leaders, governors and support staff we represent to ask government to meet us in the middle. We need bold action that addresses poverty at home, to ensure all children can thrive at school.”
The UK government’s views on tackling child poverty
A government spokesperson stated,
“Every child, no matter their background, deserves the best start in life. That’s why our child poverty taskforce will publish an ambitious strategy to tackle the structural and root causes of child poverty.”
They added,
“We are investing £500m in children’s development through the rollout of Best Start family hubs, extending free school meals and ensuring the poorest don’t go hungry in the holidays through a new £1bn crisis support package.”
Key facts about the two-child benefit cap
The benefit cap limits state support to match average working households and encourage work. It includes the two-child limit, restricting Child Tax Credit and Universal Credit to two children.
Weekly payments are £26.05 for the first child and £17.25 for additional children. Family caps are £486.98 in London and £423.46 outside London.