More than one million children in working families will be affected by the two-child benefit cap, according to new analysis, piling pressure on Labour to scrap the controversial policy.
A report by the Child Poverty Action Group (CPAG) reveals that despite having at least one parent in work, thousands of families cannot afford basic necessities because benefits do not extend to a third child or beyond.
How the two-child benefit cap works
The cap, introduced under Conservative welfare reforms in 2017, prevents parents from claiming the child element of Universal Credit — worth £292.81 per month — for a third or subsequent child.
Official figures show that 1.7 million children are currently affected, with CPAG estimating that 1 million of them belong to working families by October. Around 60% of households impacted have at least one working parent.
Families pushed below the poverty line
CPAG’s research shows that a lone parent with three children working full-time on minimum wage is £4,500 below the poverty line annually. Removing the cap would lift them £3,500 closer to financial security. Even those earning a median wage remain £2,000 under the poverty threshold, though they would be £1,500 above it if the cap ended.
The charity warns that scrapping the policy could “immediately” lift 350,000 children out of poverty at a cost of £2 billion to the Treasury.
Voices from affected families
Shauna, a mother of three, said the policy has left her family in debt: “The two-child limit is the difference between us being in debt and not. We use credit cards just to keep living.”
Another parent said: “I’m a taxpayer and my children will grow up to pay tax – but when they need support now, they’re deserted.”
Political pressure mounts on Labour
CPAG’s findings have triggered renewed calls for Labour and the government to abolish the policy. Last week, 33 MPs led by Labour’s Kim Johnson urged its removal, followed by 54 MPs backing a similar letter from Liberal Democrat spokesperson Steve Darling.
Darling said: “The two-child cap is cruel and has to end. It punishes children for circumstances beyond their control and drives families deeper into poverty.”
Government response
A government spokesperson insisted that tackling child poverty remains a priority. “Every child deserves the best start in life,” they said, pointing to investments such as £500m for Best Start Family Hubs, extended free school meals, and a £1bn crisis support package.
The two-child benefit cap has been one of the most contentious elements of welfare reform in the UK. Critics argue it disproportionately affects working families, women, and minority communities, while supporters say it encourages financial responsibility. With Labour under pressure to set out a clear child poverty strategy, the debate over the policy’s future is set to intensify in the coming months.
