Two child benefit cap axed as millions of families to gain

The controversial policy – widely blamed for pushing families into hardship – has been abolished, after the government passed new legislation.

Ministers say the move could lift around 450,000 children out of poverty by the end of this parliament—calling it the biggest reduction of its kind on record.

“A turning point” for families

The Work and Pensions Secretary, Pat McFadden, said the decision marks a major shift:

“Today is a turning point for hundreds of thousands of children across Britain.”

He added the reform is about more than immediate support: “It’s about the Britain we’re building for tomorrow.”

Employment minister Dame Diana Johnson said the policy had unfairly impacted children: “It has held children back through no fault of their own.”

What the change to the two-child benefit cap actually means

The two-child limit, introduced in 2017, restricted support in Universal Credit and Child Tax Credit to a family’s first two children.

Its removal – under the Universal Credit (Removal of Two Child Limit Act) – will take effect from April 2026, with payments updated automatically for existing claimants.

The government estimates up to 1.5 million children could benefit overall.

Most affected families were working

One of the most striking aspects of the policy is who it hit.

Around 60% of affected households have at least one parent in work, underlining that the cap largely impacted working families – not just those looking for work or who are sick or disabled.

Charities and campaigners have welcomed the move, while warning it is only a first step.

UNICEF UK said: “This is a landmark moment… one of the most powerful actions the UK can take to lift children out of poverty.”

Save the Children UK described the change as ending: “A cap on childhood.”

Meanwhile, Child Poverty Action Group said the reform would give children: “a better today and brighter tomorrow.”

Despite the change, the scale of the issue remains stark.

• Around 4.5 million children in the UK are living in poverty
• That’s roughly 31% of all children
• Levels have risen significantly over the past decade

Experts say removing the cap is one of the fastest ways to reduce poverty—but warn that housing costs, low wages and access to services still need to be tackled.

When will payments change for families?

For many families, the immediate impact will be simple: more support, automatically applied, from April.

The policy change forms part of a wider government strategy, including expanded free school meals and childcare support.

Taken together, ministers say these measures could lift up to 550,000 children out of poverty by the end of the parliament.