The two-child benefit cap was introduced over a decade ago as part of austerity measures and limits Universal Credit’s child element top-up to just the first two children in a household. As a result, families with three or more children have not received additional support, despite the rising costs of living. According to research, lifting this cap would immediately benefit over 67,000 children in Birmingham alone, offering a crucial financial lifeline to many families in the city, where the number of households with three or more children is higher than anywhere else in the country.
The Struggles of Larger Families in Birmingham
Birmingham has one of the highest proportions of larger families in the UK, with nearly a quarter of families in the city having three or more children. According to data from BirminghamLive, 15.9% of families in the city have three children, while 6.1% have four, and 2.8% have five or more. This makes the issue particularly relevant for Birmingham, where the financial impact of the two-child cap has been felt acutely.
Under the current rules, parents only receive the Universal Credit child element top-up of £292.81 per month for their first two children. This policy has left many families with more than two children in financial distress, even though they may be working and contributing to the economy. In some of Birmingham’s most affected constituencies, such as Ladywood, Hodge Hill, and Yardley, large proportions of children are impacted by this limit, with up to a third of children in these areas facing the consequences.
For working parents who rely on Universal Credit to bridge the gap between their wages and living costs, the two-child limit has meant a stark financial reality. Many families find themselves struggling to afford basic necessities for their children, often relying on food banks or taking on additional debt to stay afloat.
Political and Public Pressure to Lift the Cap
The two-child cap has been a point of contention for years, with widespread criticism from campaigners and opposition MPs. The Resolution Foundation think tank has described the policy as a major factor driving child poverty in the UK, particularly for larger families. Joseph Howes, Chair of the End Child Poverty Coalition, emphasized that no child poverty strategy could succeed while the two-child limit remained in place, arguing that its continued existence would undermine any efforts to reduce poverty.
While the current government has made moves to address child poverty in various ways, the two-child cap has remained in place, despite growing calls for its abolition. Prime Minister Sir Keir Starmer has yet to make a definitive commitment to lifting the cap, but many Labour MPs, including Zarah Sultana and Liam Byrne, have openly expressed their support for scrapping it.
This shift in policy is expected to be a key moment in today’s Budget. Campaigners argue that removing the cap will not only provide immediate relief to struggling families but also help to prevent long-term poverty cycles, ensuring that children can grow up with better prospects and fewer financial barriers.
