Plans to Lift UK Two-Child Benefit Cap Could Cost Taxpayers £3.5bn

The UK government is considering scrapping the two-child benefit cap, a policy introduced by the Conservatives in 2017 that limits child tax credit and Universal Credit to the first two children born after April 2017. Labour, along with the Reform Party, is pushing to lift this cap, which critics argue has worsened child poverty by reducing payments by an average of £4,300 per family. Prime Minister Sir Keir Starmer has recently indicated willingness to remove the cap, which would potentially provide thousands of pounds in extra benefits annually to approximately 180,000 large families where no one is employed. The policy currently affects around 450,000 families, many with three or more children, and lifting it could cost taxpayers an estimated £3.5 billion. Opponents, including some Conservative figures, argue that removing the cap encourages families to have more children they cannot afford, placing an unfair financial burden on taxpayers. Despite the controversy, government officials have not ruled out any measures to tackle child poverty, signaling possible policy changes ahead.