DWP two-child benefit cap axe now in law as 450,000 set to be lifted out of poverty

Under the previous system, families claiming Universal Credit or Child Tax Credit received no additional support for third or subsequent children born after April 2017.

The Government has described the measure as the most cost-effective intervention available to reduce poverty rates.

Households already receiving Universal Credit will have the change applied automatically without needing to take any action.

Government estimates indicate that 450,000 children will be moved out of poverty before the end of this parliamentary term, representing the largest single-year reduction since comparable records began in the 1990s.

The policy change could benefit as many as 1.5 million children across Great Britain.

Working households are expected to see the greatest impact, with around 60 per cent of families affected by the cap having at least one parent in employment.

Nearly half of those impacted were not claiming Universal Credit when their children were born.

The legislation forms a central part of the Child Poverty Strategy published in December 2025, which combines the reform with expanded free school meals and enhanced childcare provision to lift an estimated 550,000 children out of poverty.

Pensions Secretary Pat McFadden said: "Today is an historic day, marking a turning point for 450,000 children across Britain."

He added: "Scrapping the two-child limit is about more than family finances today, it's about the Britain we're building for tomorrow."

Mr McFadden also said children raised in poverty are more likely to leave education without qualifications and less likely to secure employment.

Employment Minister Diana Johnson said: "For too long, the two-child limit has held children back through no fault of their own."

She added: "With the law now changed, hundreds of thousands of children will grow up with greater security and opportunity."

Philip Goodwin, chief executive of UNICEF UK, said: "This is a landmark moment."

He added: "This is one of the most powerful actions the UK can take to lift children out of poverty, and it will transform lives for years to come."

Dan Paskins, executive director of UK impact at Save the Children UK, also said: "There is now more of a chance that incomes will match the real cost of raising a family."

Sara Ogilvie, director of policy, rights and advocacy at Child Poverty Action Group, added: "The abolition of the two-child limit by Parliament is an important and welcome first step in driving down child poverty."

She continued: "Protecting children from poverty is the right thing to do and lays the foundations for a stronger country for us all."