Rise in number of large families having benefits capped

The number of families hit by the government’s two-child benefit cap has reached a record high, with almost half a million households now affected.

According to the latest figures from the Department for Work and Pensions, 469,780 households saw their universal credit reduced in April 2025 because of the cap - a 3% rise on the previous year.

The rule means families can’t claim additional child-related universal credit payments for a third or any subsequent children born after 6 April 2017. That’s a loss of up to £3,513.72 a year per child, and it now affects an estimated 1.67 million children.

This comes after the Joseph Rowntree Foundation revealed that a growing number of low-income, large families are getting into debt to pay for essentials.

How did we get here?

The two-child cap was introduced by the government in 2017 as a cost-saving measure. But charities and campaigners say it’s pushing families deeper into poverty.

The Child Poverty Action Group (CPAG) estimates the policy has plunged 350,000 children into poverty and made life even harder for another 700,000. Lynn Perry, CEO of Barnardo’s, said:

“Ending the policy would lift half a million children out of poverty.”

Although Labour leader Sir Keir Starmer previously said removing the cap was unaffordable, reports emerged earlier this year that he had asked the Treasury to explore ways to fund its removal. However, the idea was shelved following the recent £5bn welfare U-turn.

Who’s exempt from the two-child cap?

There are exceptions to the rule, including if:

• your third (or later) child was born before April 6, 2017
• your child has a disability
• your child was adopted
• you had a multiple birth (e.g. twins)
• you are a guardian or looking after the child under a court order
• the child was conceived as a result of rape, and you are not living with the perpetrator

What help is available if you're struggling?

If the two-child cap is affecting you, there may still be other forms of support available.

Free childcare

You could be entitled to:

• 15 hours of free childcare a week for children aged nine months to two years (rising to 30 hours from September 2025)
• 30 hours of free childcare a week for three to four-year-olds

To qualify, you’ll usually need to be working and earning at least the equivalent of 16 hours at minimum wage, with an income of less than £100,000 per year (per parent).

Some two-year-olds also qualify if you’re on benefits like universal credit, income support, or employment and support allowance.

Universal credit childcare costs

If you're working and on universal credit, you could get up to:

• £1,031.88 a month for one child
• £1,768.94 a month for two or more children

In most cases, you'll need to pay upfront and claim the money back, but if you're returning to work or increasing your hours, you may be able to get it paid in advance.

Child benefit

You can claim child benefit for all your children, regardless of how many you have. You can even backdate your claim for up to three months.

Current rates are:

• £26.05 a week for your first child
• £17.25 a week for each additional child

If you or your partner earns over £60,000, you may need to repay some (or all) of it through the high income child benefit charge.

Need advice?

If you're struggling to make ends meet or aren’t sure what support you’re entitled to, we can help. We offer confidential advice on benefits, budgeting and debt both online and over the phone.