Two-child limit squeezing families in cost of living crisis, survey shows

A new survey has found widespread suffering and hardship among families affected by the two-child benefits limit, with parents struggling to meet children’s basic needs as living costs soar.

The two-child limit, which was introduced six years ago, restricts child allowances in universal credit (UC) and tax credits (worth up to £3,235 a year) to the first two children in a family, unless the children were born before April 2017 when the policy was introduced.

Child Poverty Action Group (CPAG) has conducted the rolling survey since 2019, during which time it has collected 3,000-plus responses from parents subject to the limit.

The survey has recorded a sharp rise in the number of families reporting that the policy has affected their ability to pay for gas and electricity, despite government intervention – from 73% in 2021/22 to 82% in 2022/23.

The number of working families affected by the policy who say it has affected their ability to pay for food has risen from 78% in 2021/22 to 87% in 2022/23. The rate among non-working households has consistently reached 90% since 2019.

Most families (58%) who are subject to the policy are working and CPAG estimates 1.5m children are currently affected by it, including 1.1m growing up in poverty.

The impact of the policy on families’ budgets has been compounded by the cost-of-living crisis. While the government has provided support with living costs for low-income households, the payments are flat-rate and therefore take no account of children. And although benefits will increase in line with inflation this month, the continued application of the two-child limit means affected families will still be well short of what they need.

CPAG said that abolishing the two-child limit would lift 250,000 children out of poverty, and a further 850,000 children would be in less deep poverty at cost of £1.3bn. Unless the policy is abolished, CAPG warned the number of children affected will reach 3m as more children are born under the policy.

CPAG Chief Executive Alison Garnham said: ‘Six years to the day since this nastiest of policies came into effect, our survey is showing its devastating effects. The two-child limit makes it impossible for parents to provide their children with essentials – and the cost of living crisis is adding extra pain. The number of children in poverty rose by 350,000 last year – and the two-child limit played a big part in that rise. There is no place for this policy in a country that believes all children deserve a good start. Ministers must remove it before it does more damage to children and to family life.’

Image: Philip Veater