Around 38 per cent of all large families (with at least three
children) were affected by the two-child limit on benefit support
in April 2024, and the policy is set to push the majority of
large families below the poverty line by the end of the
parliament, the Resolution Foundation said today (Thursday) in
response to new DWP data.
450,000 families were affected by the two-child limit in April
2024, up from just 70,000 in 2018. The Foundation notes that over
a third (37.5 per cent) of the roll-out of the policy is still to
come, with around 720,000 families due to be affected by the time
it is fully rolled out in the mid-2030s. By that time, 61 per
cent of large families will be affected. A total of 1.6 million
children live in families affected by the policy, an increase
from 1.5 million in April 2023.
The Foundation notes that families in London are most likely to
be affected by the policy, with 69,000 households in London
affected by the policy. And despite the common perception that
the policy affects workless households, around three-in-five
households affected by the policy actually have someone in work.
The impact of the policy on those affected is stark, with
families capped by the two-child limit losing up to around £3,500
a year in benefit support for their third and each subsequent
child.
As a result, the policy is driving up rates of child poverty
among large families. The Foundation notes that around
two-in-five (41 per cent) large families were in poverty in
2016-17, before the policy was introduced, but that is set to
rise to over half (51 per cent) by the end of the parliament
(2028-29).
The Foundation's analysis shows that if the policy were abolished
today, it would lift around 490,000 children out of poverty.
Abolishing the two-child limit would cost around £2.5 billion
today, rising to £3 billion if combined with the abolition of the
Benefit Cap. The eventual cost of abolishing the two-child limit
could rise to around £3.6 billion a year, as more families are
affected.
Lalitha Try, Economist at the Resolution Foundation,
said:
“The two-child limit on benefit support now affects almost
two-in-five large families in Britain.
“There isn't much evidence to show that the policy has achieved
its stated aims of boosting employment and reducing the number of
children families have. But there is clear evidence of the
financial losses that affected families are facing, and rising
rates of poverty.
“Unless the policy is abolished, the majority of children in
large families will fall below the poverty line by the end of the
parliament. Any new child poverty strategy should find the funds
to remove it.”
