10,000 children dragged into poverty by two-child limit since Labour took office

As MPs return to Parliament today, new analysis from Child Poverty Action Group shows 10,000 children have been pulled into poverty by the two-child limit since the government took office. That’s 109 children each day since July 5th. 

Chief Executive of Child Poverty Action Group Alison Garnham said: 

'The clock is ticking while child poverty rises – and the two-child limit is the key driver of the increase. Scrapping it is the most cost-effective way to stop more kids being pulled into poverty on the Government’s watch. We welcome the government’s child poverty taskforce but the damage grows every day - the policy must be abolished in the upcoming Budget.'

Parents affected by the policy told Child Poverty Action Group about its impact:

‘It makes you feel like you’re failing your children. We have always worked; we’ve always tried as hard as we can but now it [our income] just doesn’t go far enough. With the support only for two out of the four children, if something pops up, we have no savings so we can’t cover it unless we starve ourselves. My youngest has never been to a soft-play. We can’t afford to do anything as a family now, and my older children don’t understand it as we used to go out quite a lot and now we can’t....’  

(Couple-mother working full-time, father lost his job) 

'[The two-child limit] means my youngest doesn't enjoy the same things as my other 2 children did. E.g. swimming, baby groups. Can't go to farms or walks in the forest as we don't have spare money for treats.'

(Couple with 3 children, working household (at least one parent working part-time) 

'For the older two children, they can’t do activities after school or in holidays, sometimes can’t go to school trips, and sometimes they don’t go to a friend’s party as we can’t afford a gift.'

(Single mother with 3 children, not working)

'Child benefit for my youngest only covered formula milk for half the week so I was having to borrow money constantly to provide the basic essentials to feed her.'

(Single parent with 4 children not working) 

'It [the two-child limit] limits the food the children can eat. And the clothes they can have. Sometime shoes will have holes in them before I could buy new ones.'

(Couple-mother, with 5 children, working household (at least one parent working full-time).  

'It [my third pregnancy] was a high risk pregnancy, yet he was born – a miracle baby, but in the eyes of the government and according to this policy, he doesn’t exist.'

(Single parent with 3 children, not working)

Note to editors:

The two-child limit denies child allowances in universal credit (UC) and tax credits worth up to £3,455 per year to third or subsequent children born after April 2017. Abolishing the two-child limit is the most cost-effective way to reduce child poverty which is at a record level ( 4.3 million children in poverty). 

Previous CPAG estimates show scrapping the two-child limit today would instantly pull 300,000 children out of poverty as well as reducing the depth of poverty for 700,000 more.   

DWP statistics show 1.6 million children are currently affected by the two-child limit. That’s one in nine children (including all children in a household affected by the policy rather than only third or subsequent children who are not eligible for child allowances in universal credit or tax credits). 59% of families affected by the policy have at least one working parent. 62% of affected families have three children, 25% have four and 12% have five or more. 

 Methodology note for calculation of the 10,000 figure:

  • The calculation uses the underlying data from Households Below Average Income, the source of official poverty stats
  • This data is inputted to UKMOD (tax-benefit microsimulation software) which looks at reported household characteristics, reported level of earnings, reported amounts of benefits received etc to calculate benefit entitlement
  • Removing the two-child limit is then run through the software to estimate its impact on poverty and government spending compared to the status quo
  • For future years assumptions are made about factors such as earnings growth/benefits uprating/characteristics of households and the same before/after calculation is done
  • These calculations give the per-year effect which are then divided to get the figure for the period since July 5th 2024. 

CPAG media contact Jane Ahrends 07816 909302