In the Autumn Budget Statement 2025, the Chancellor of the Exchequer, Rachel Reeves, announced the scrapping of the two-child benefit cap. The policy had long been criticised for exacerbating child poverty and the Government estimates that its abolition will mean that 450,000 fewer British children will be living in poverty by 2029/30.
What is the two-child cap on benefits?
In 2017, the government introduced a benefits policy that means Universal Credit related child benefits are not payable beyond a person or couple’s first two children. The cap on benefits does not affect children born before the policy was introduced. The child element of the benefit that is currently paid at a rate of £292.81 for children born after 6 April 2017 and at £339.00 per month for those born before this date, is paid for the oldest and second child of Universal Credit claimants - no payment is claimable for any subsequent children.
There are exceptions to this such as adopted children, twin births and non-consentially conceived children as well as children in a caring arrangement. Importantly, the two-child cap policy does not affect Child Benefit which is a separate benefit paid to households earning less than £80,000 each year.
How will child tax benefits change from April 2026?
Universal Credit payments are based on your personal circumstances and will vary depending on any money you earn and capital deposits you may have. Families with more than two children who previously did not qualify for child benefit payments for subsequent children will be able to do so from April 2026. The Office for Budget Responsibility (OBR) has estimated that around 560,000 families will receive an extra £442.50 on average each month as a result of the benefit changes announced.
The Budget also confirmed that Universal Credit standard payments will increase by more than 6% in April 2026 to comply with the Universal Credit Act 2025. At the same time, the child element of universal credit will be uprated by 3.8% to reflect September 2025 CPI.
Potential effect of scrapping the two-child benefit cap for a family with four children
| Monthly Universal Credit Child Element - Current | Monthly Universal Credit Child Element - From 1 April 2026 | |
| Oldest or only child (born before 6 April 2017) | £339.00 | £351.88 |
| Oldest or only child (born on or after 6 April 2017) | £292.81 | £303.94 |
| Second child | £292.81 | £303.94 |
| Third child | £0.00 | £303.94 |
| Fourth child | £0.00 | £303.94 |
The amount a family can claim will vary depending on their personal and financial circumstances.
Why has the government scrapped the two-child benefit cap?
In 2017, the then Conservative government introduced the two-child cap on benefits to reduce the welfare bill and encourage those on low incomes to consider the financial impact of having more children. However, it was deemed that the policy did little to deter families from having more children. Currently 1.7 million children live in households that are adversely affected by the policy, according to Save The Children. The Government has stated that, "This is a key measure in the Government’s agenda to tackle Child Poverty and ensure all children have the Best Start in Life."
Campaigners against the policy also criticised the ‘rape clause’ - a reference to the requirement for anyone claiming under the non-consentially conceived exception - as immoral and devastating for women who were required to prove that the child had been conceived without their consent. During her Budget announcement, the Chancellor, Rachel Reeves, said she could not “ in good conscience leave in place the vile policy known as the rape clause” and that she would “not tolerate the grotesque indignity of women.” The decision was well received by those who campaigned for it - the Chief Executive of Child Poverty Action Group, Alison Garnham, asserted the decision would be "transformational for children".
However, there was criticism from those who opposed the removal of the two-child limit, arguing that the cost to the taxpayer was unfair. The Office for Budget Responsibility (OBR) stated that "the removal of the two-child limit within universal credit (UC)... increases spending by £3.0 billion by 2029-30". The Government has responded by balancing the extra spending from the public purse with funds that would be raised through reforms to online gambling duties as well as restrictions applied to "luxury vehicles" through the Motability scheme.
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