Budget 2025: Two-child benefit cap to be scrapped

The cap on the number of children you can claim benefits for is to be scrapped.

Since April 2017, parents have only been able to claim child tax credit or universal credit for a maximum of two children per household.

But in today’s Budget, chancellor Rachel Reeves confirmed the cap will be lifted from April 2026, which she believes will lift 450,000 children out of poverty.

“I don’t intend to preside over a status quo that punishes children for the circumstances of their birth and demands that we all pay three times over for it,” Reeves said.

"There are many reasons why people choose to have children and then find themselves in difficult times.

"I don't believe children should bear the brunt of that.”

The move had been widely expected, as ministers have repeatedly refused to rule out scrapping the cap in recent months.

And the government had faced strong pressure from child poverty charities to get rid of the two-child limit.

Rape clause to be removed

The chancellor also pledged to scrap the so-called rape clause, which requires women to prove their children were conceived non-consensually to get support.

Reeves described this as a “vile policy” that subjects women to “gross indignity”.

“It is dehumanising, it is cruel and I will remove it from the statute book,” she said.

Financial relief for families

Caroline Chell, head of communications at Money Wellness, said: “One in five parents we support have been affected by the two-child cap. 

“Ending the cap will give families much-needed financial relief, helping them cover essentials like food, rent and energy bills, and reduce reliance on food banks and high-cost credit. 

“This change will ensure that children in these families have the support they need to thrive. 

“It will not encourage families to have more children. 

“It simply means every child receives the care and support they deserve.”

How has the two-child limit affected working parents?

The Child Poverty Action Group recently surveyed working parents affected by the two-child limit and found that in the last year, 93% had struggled to pay for food because of the policy.

This was followed by:

• clothing - 84%
• gas or electricity - 72%
• childcare - 49%
• travel - 44%
• rent or mortgage payments - 43% 

Find out what benefits you can claim

If you’re struggling to cover your day-to-day expenses, we can check you’re getting all the support you’re entitled to.

So get in touch or try our benefits calculator to see what support you could receive.