UK to Abolish Two-Child Benefit Cap from April 2026, Pledges to Lift Hundreds of Thousands of Children Out of Poverty
Budget 2025 ends cap on welfare payments per child, restoring support for families with three or more children
The UK government has announced that it will formally scrap the two-child benefit cap from April 2026, delivering a major change to welfare policy that will restore full Universal Credit entitlement for larger families.
The decision — unveiled in the 2025 Budget — is projected to lift 450,000 children out of relative low income, and bring improved financial security for many households with three or more children.
Under the current cap, introduced in 2017, families have received Universal Credit child payments only for their first two children; a third or subsequent child born on or after April 6, 2017 generally receives no such payment.
The cap has affected roughly 1.6 million children across the United Kingdom.
Government modelling estimates that by the end of the current parliament, in the financial year 2029–30, removing the cap will reduce relative low-income rates after housing costs for about 450,000 children and 150,000 working-age adults.
Additional data suggests that up to two million children will live in households that experience increased income as a direct result of the change.
Families impacted by the cap may see a substantial increase in support: the previous policy could deny eligible households around £3,500 per extra child each year.
With the cap removed, many parents expect a meaningful boost in their ability to cover essentials such as food, heating, clothing and rent — costs that had weighed heavily on larger families since the cap’s introduction.
The policy reversal has drawn praise from anti-poverty campaigners and social-security advocates, who argue that the cap deepened poverty and hardship among children in larger households.
These supporters emphasise that scrapping the limit restores fairness and reverses a measure that disproportionately affected low-income families.
Nonetheless, the change comes amid wider fiscal adjustments laid out in the Budget.
Critics warn that additional welfare spending must be balanced against the government’s broader financial commitments.
But the government says the move has been “fully costed and fully funded,” framing it as a cornerstone of its agenda to reduce child poverty and support families in need.
For UK parents with three or more children, the April 2026 removal of the cap effectively restores access to child payments for every child — a policy shift that may substantially improve the economic prospects and living standards of hundreds of thousands of children and families nationwide.
The decision — unveiled in the 2025 Budget — is projected to lift 450,000 children out of relative low income, and bring improved financial security for many households with three or more children.
Under the current cap, introduced in 2017, families have received Universal Credit child payments only for their first two children; a third or subsequent child born on or after April 6, 2017 generally receives no such payment.
The cap has affected roughly 1.6 million children across the United Kingdom.
Government modelling estimates that by the end of the current parliament, in the financial year 2029–30, removing the cap will reduce relative low-income rates after housing costs for about 450,000 children and 150,000 working-age adults.
Additional data suggests that up to two million children will live in households that experience increased income as a direct result of the change.
Families impacted by the cap may see a substantial increase in support: the previous policy could deny eligible households around £3,500 per extra child each year.
With the cap removed, many parents expect a meaningful boost in their ability to cover essentials such as food, heating, clothing and rent — costs that had weighed heavily on larger families since the cap’s introduction.
The policy reversal has drawn praise from anti-poverty campaigners and social-security advocates, who argue that the cap deepened poverty and hardship among children in larger households.
These supporters emphasise that scrapping the limit restores fairness and reverses a measure that disproportionately affected low-income families.
Nonetheless, the change comes amid wider fiscal adjustments laid out in the Budget.
Critics warn that additional welfare spending must be balanced against the government’s broader financial commitments.
But the government says the move has been “fully costed and fully funded,” framing it as a cornerstone of its agenda to reduce child poverty and support families in need.
For UK parents with three or more children, the April 2026 removal of the cap effectively restores access to child payments for every child — a policy shift that may substantially improve the economic prospects and living standards of hundreds of thousands of children and families nationwide.
