Two-child limit and benefit cap at odds with commitment to end child poverty

Latest Government statistics have shown that in April 2025, 469,780 Universal Credit households were affected by the two-child limit policy: that is, they had a third or subsequent child born on or after 6TH April 2017. This was an increase of 13,520 (3%) from the total number of households affected on either Universal Credit or Child Tax Credit in April 2024. There were 1,665,540 children living in the households affected in April 2025, an increase of 37,150 (2%) from the total number of children living in the households affected on either Universal Credit or Child Tax Credit in April 2024

There were 453,600 Universal Credit households that were not receiving the child element for at least one child because of the policy, with 1,613,980 children living in these households

26,300 households had an exception to the two child limit policy. The most common reason for an exception was for multiple births, accounting for 17,730 households (or 67% of those with an exception). The number of households affected by the policy has increased since the first statistics were published in 2018, as more children have been born since 6 April 2017 into families with at least two existing children

Child Tax Credit closed in April 2025, which means the two child limit policy now only applies to Universal Credit. Therefore, there are no new statistics for Child Tax Credits in this publication.

In response, StepChange Debt Charity says the two-child limit and benefit cap is exacerbating hardship for low income families, and is at odds with the government’s commitment to end child poverty.

Peter Tutton, Director of Policy, Research and Public Affairs at StepChange Debt Charity, said “People with dependent children are at greater risk of problem debt and financial hardship, which has only worsened in recent years as cost of living pressures have intensified. Our data show parents with more than two children are disproportionately represented among StepChange clients seeking debt advice and are significantly more likely to be behind on priority bills.

“Since the introduction of the two-child limit, the number of families with more than two children living in poverty has relentlessly increased – the Government must use the new child poverty strategy to end the policy. We’re calling for a more compassionate social security system, one that helps families cover essential costs and build long-term financial resilience.”