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Reeves Expected to Act on Two-Child Benefit Cap in November Budget

Officials are testing tapered and targeted designs to manage costs that analysts put near £3bn a year.

Overview

  • Multiple outlets report government sources expect the Chancellor to announce changes at the Budget, though the final design has not been decided.
  • Options under active consideration include a taper that reduces payments for additional children, extending support only up to three or four children, or limiting changes to working parents on universal credit.
  • The government’s Child Poverty Taskforce is expected to urge lifting the limit, and Education Secretary Bridget Phillipson said removing it is “definitely on the table.”
  • Estimates suggest full abolition would cost roughly £3bn–£3.5bn annually, and officials are concerned about very large families receiving thousands more per year if the cap ends outright.
  • About 1.6–1.7 million children are currently affected, and ministers face pressure from Labour MPs and campaigners as funding options, including potential tax rises or gambling levies, are debated for the Budget.