Scrapping two-child cap wouldn’t improve child poverty without end to benefit cap too

Ending the two-child limit wouldn’t be enough to lift young people out of poverty while the wider benefit cap is still in place, research shows.

The government is under pressure to scrap the two-child cap, which means households can only claim universal credit and child tax credits for up to two children.

The impact of the two-child cap

Ahead of July’s general election, research by Loughborough University found a strong link between child poverty and the two-child cap.

Over 30% of children live in poverty in the UK – the equivalent of nine children in every classroom. And official figures show 1.6 million children are being affected by this limit..

That’s why, along with many organisations, MPs and charities, we’ve been calling for an end to the two-child limit.

Double the trouble

But figures by the Department for Work and Pensions (DWP) show that even if the two-child limit were scrapped, 100,000 young people would still be living in poverty.

That’s because even if the two-child cap were scrapped, hundreds of thousands would continue to live in poverty due to the overall benefit cap.

This wider cap limits the total number of benefits that working-age households can get. The amount depends on where you live and your circumstances. Find out which benefits are affected by this cap here.

The most recent figures show 27,000 households claiming universal credit are being affected by both the two-child limit and the benefit cap.

But the total number of households is likely to be higher because DWP data doesn’t take into account those receiving old-style child tax credits and households in Northern Ireland.

Households  affected by both caps lose an average of £273 a month, totalling £3,176 a year, the DWP figures show. And there are 4,120 households that miss out on more than £500 a month (£6,000 a year) due to the caps.

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