DWP Abolishes Two-Child Benefit Cap, Boosting Universal Credit by £3,500 Per Child

The Department for Work and Pensions (DWP) has announced a significant change to Universal Credit that will benefit many families across the UK. Starting April 6, 2026, the two-child benefit cap will be removed, allowing households to receive the child element of Universal Credit for every child they care for, without restriction.

Previously, families were limited to claiming child benefits for just two children, affecting approximately 1.7 million children in 2025—about one in nine children nationwide. The child element of Universal Credit is valued at £333.33 monthly for a first child (born before April 6, 2017) and £287.92 for each additional child. With the cap lifted, third and subsequent children will now receive an estimated additional £3,500 annually each, according to Save the Children.

Research underscores the importance of this change. Professor Donald Hirsch’s “The Cost of Child Poverty 2023” report highlights that child poverty costs the UK economy around £39 billion each year due to impacts on health, education, and employment prospects.

Save the Children praised the policy shift, calling it “real, meaningful progress” and one of the most significant steps against child poverty in a decade. However, the organization emphasized that more remains to be done, noting the ongoing limitations imposed by the Benefit Cap on the most vulnerable families. They vowed to continue advocating for comprehensive support aimed at ensuring every child has the resources needed to thrive.

Parents like a mother of three, who spoke to The Guardian, underline the real-world impact. Struggling with school debts within weeks of term starting, she expressed relief at the policy change but also highlighted ongoing financial challenges faced by families trying to make ends meet.

This rule change marks a pivotal step toward reducing child poverty and supporting families in the UK.