Skip to content
Merged
Show file tree
Hide file tree
Changes from all commits
Commits
File filter

Filter by extension

Filter by extension

Conversations
Failed to load comments.
Loading
Jump to
Jump to file
Failed to load files.
Loading
Diff view
Diff view
10 changes: 7 additions & 3 deletions changelog_entry.yaml
Original file line number Diff line number Diff line change
@@ -1,4 +1,8 @@
- bump: minor
- bump: patch
changes:
added:
- UK two-child limit policy comparison dashboard as a featured tile on UK homepage
changed:
- Updated two-child limit post with primary sources from IFS, IPPR, and Resolution Foundation
- Added specific years for all cost estimates
- Replaced secondary news links with direct links to research organisations
- Added appendix table comparing year-by-year cost estimates across organisations
- Corrected IFS estimates based on their October 2024 report showing £2.5bn for two-child limit removal alone
54 changes: 38 additions & 16 deletions src/posts/articles/uk-two-child-limit.md
Original file line number Diff line number Diff line change
Expand Up @@ -87,16 +87,7 @@ At lower income ranges, the reform delivers larger increases in household net in

## Budgetary impact

PolicyEngine estimates that removing the two-child limit would cost £2.7 billion in 2026-27, rising to £3.0 billion by 2029-30. The cost increases over time as more children are born after April 2017, when the cap was introduced, making fewer families eligible for transitional protection.

| Year | Cost |
| ---- | --------------------------------------------------------------------------------------------------------------------------------------- |
| 2026 | [£2.7 billion](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=93219&region=uk&timePeriod=2026&baseline=1) |
| 2027 | [£2.9 billion](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=93219&region=uk&timePeriod=2027&baseline=1) |
| 2028 | [£3.0 billion](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=93219&region=uk&timePeriod=2028&baseline=1) |
| 2029 | [£3.0 billion](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=93219&region=uk&timePeriod=2029&baseline=1) |

The Institute for Fiscal Studies estimates the cost at [£3.4 billion](https://www.dailyrecord.co.uk/news/politics/rachel-reeves-decision-axe-two-35993258), while the Institute for Public Policy Research estimates [£3.2 billion](https://www.independent.co.uk/news/uk/politics/two-child-benefit-cap-bridget-phillipson-labour-b2836482.html) in 2026-27.
PolicyEngine estimates that removing the two-child limit would cost £2.7 billion in 2025-26, rising to £3.1 billion by 2029-30. The cost increases over time as more children are born after April 2017, when the cap was introduced, making fewer families eligible for transitional protection. See the Appendix for a comparison of cost estimates from different organisations across years.

## Distributional impact

Expand Down Expand Up @@ -320,14 +311,15 @@ Figure 3 shows that 4.6% of the population would see income gains from removing

## Poverty impact

By age group, removing the two-child limit would reduce poverty rates most for children across all years. The child poverty rate would fall by 16.2% in 2026-27 and by 16.4% in 2029-30, while the overall poverty rate would decline by 7.1% in 2026-27 and by 7.4% in 2029-30.
By age group, removing the two-child limit would reduce poverty rates most for children across all years. Using the absolute poverty measure before housing costs, the child poverty rate would fall by 13.6% in 2025-26 and by 15.5% in 2029-30, while the overall poverty rate would decline by 6.5% in 2025-26 and by 7.3% in 2029-30.

| Year | Children | All |
| ---- | ------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------ |
| 2026 | [-16.2%](https://policyengine.org/uk/policy?focus=policyOutput.povertyImpact&reform=93219&region=uk&timePeriod=2026&baseline=1) | [-7.1%](https://policyengine.org/uk/policy?focus=policyOutput.povertyImpact&reform=93219&region=uk&timePeriod=2026&baseline=1) |
| 2027 | [-17.7%](https://policyengine.org/uk/policy?focus=policyOutput.povertyImpact&reform=93219&region=uk&timePeriod=2027&baseline=1) | [-7.9%](https://policyengine.org/uk/policy?focus=policyOutput.povertyImpact&reform=93219&region=uk&timePeriod=2027&baseline=1) |
| 2028 | [-16.9%](https://policyengine.org/uk/policy?focus=policyOutput.povertyImpact&reform=93219&region=uk&timePeriod=2028&baseline=1) | [-7.6%](https://policyengine.org/uk/policy?focus=policyOutput.povertyImpact&reform=93219&region=uk&timePeriod=2028&baseline=1) |
| 2029 | [-16.4%](https://policyengine.org/uk/policy?focus=policyOutput.povertyImpact&reform=93219&region=uk&timePeriod=2029&baseline=1) | [-7.4%](https://policyengine.org/uk/policy?focus=policyOutput.povertyImpact&reform=93219&region=uk&timePeriod=2029&baseline=1) |
| 2025 | [-13.6%](https://policyengine.org/uk/policy?focus=policyOutput.povertyImpact&reform=93219&region=uk&timePeriod=2025&baseline=1) | [-6.5%](https://policyengine.org/uk/policy?focus=policyOutput.povertyImpact&reform=93219&region=uk&timePeriod=2025&baseline=1) |
| 2026 | [-15.7%](https://policyengine.org/uk/policy?focus=policyOutput.povertyImpact&reform=93219&region=uk&timePeriod=2026&baseline=1) | [-7.4%](https://policyengine.org/uk/policy?focus=policyOutput.povertyImpact&reform=93219&region=uk&timePeriod=2026&baseline=1) |
| 2027 | [-15.8%](https://policyengine.org/uk/policy?focus=policyOutput.povertyImpact&reform=93219&region=uk&timePeriod=2027&baseline=1) | [-7.4%](https://policyengine.org/uk/policy?focus=policyOutput.povertyImpact&reform=93219&region=uk&timePeriod=2027&baseline=1) |
| 2028 | [-16.3%](https://policyengine.org/uk/policy?focus=policyOutput.povertyImpact&reform=93219&region=uk&timePeriod=2028&baseline=1) | [-7.8%](https://policyengine.org/uk/policy?focus=policyOutput.povertyImpact&reform=93219&region=uk&timePeriod=2028&baseline=1) |
| 2029 | [-15.5%](https://policyengine.org/uk/policy?focus=policyOutput.povertyImpact&reform=93219&region=uk&timePeriod=2029&baseline=1) | [-7.3%](https://policyengine.org/uk/policy?focus=policyOutput.povertyImpact&reform=93219&region=uk&timePeriod=2029&baseline=1) |

## Inequality impact

Expand All @@ -351,6 +343,36 @@ The constituencies experiencing the largest relative income gains include Bradfo

## Conclusion

Removing the two-child benefit limit would cost £2.7 billion in 2026-27, rising to £3.0 billion by 2029-30. The reform would reduce child poverty by 16.2% and overall poverty by 7.1% in 2026-27.
Removing the two-child benefit limit would cost £2.7 billion in 2025-26, rising to £3.1 billion by 2029-30. The reform would reduce absolute child poverty (before housing costs) by 13.6% and overall absolute poverty by 6.5% in 2025-26.

We invite you to explore the [PolicyEngine webapp](https://policyengine.org/) to model your own customised reforms.

## Appendix: Cost estimates by organisation and year

The following table compares cost estimates for abolishing the two-child limit from different organisations.

| Year | PolicyEngine | IFS | JRF | Resolution Foundation |
| ----------------- | --------------------------------------------------------------------------------------------------------------------------------- | ---------- | ---------- | --------------------- |
| 2024-25 | — | — | — | £2.5bn |
| 2025-26 | [£2.7bn](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=93219&region=uk&timePeriod=2025&baseline=1) | — | £2.7bn[^1] | — |
| 2026-27 | [£2.8bn](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=93219&region=uk&timePeriod=2026&baseline=1) | — | — | — |
| 2027-28 | [£2.9bn](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=93219&region=uk&timePeriod=2027&baseline=1) | — | — | — |
| 2028-29 | [£3.0bn](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=93219&region=uk&timePeriod=2028&baseline=1) | — | — | — |
| 2029-30 | [£3.1bn](https://policyengine.org/uk/policy?focus=policyOutput.policyBreakdown&reform=93219&region=uk&timePeriod=2029&baseline=1) | — | £2.8bn[^2] | — |
| Long run | — | £2.5bn[^3] | — | — |
| Full coverage[^4] | — | — | — | £3.6bn |

[^1]: JRF estimate includes both two-child limit and benefit cap removal. Source: JRF analysis using IPPR tax-benefit model (Parkes et al 2025). JRF's earlier estimate from May 2025 showed £2.0bn for two-child limit only in 2025/26

[^2]: JRF estimate for two-child limit only. JRF's earlier estimate from May 2025 also showed £2.8bn for 2029/30

[^3]: IFS estimate from October 2024 report "Child poverty: trends and policy options". Would cost £3.3bn if household benefit cap also removed

[^4]: Full coverage expected around 2035 when all children potentially affected

Sources:

- PolicyEngine: This analysis
- IFS: [The two-child limit: poverty, incentives and cost](https://ifs.org.uk/articles/two-child-limit-poverty-incentives-and-cost)
- JRF: [Getting the child poverty strategy we need](https://www.ippr.org/articles/getting-the-child-poverty-strategy-we-need) (IPPR/JRF collaboration), [Two policies to boost family living standards and reduce child poverty](https://www.jrf.org.uk/child-poverty/two-policies-to-boost-family-living-standards-and-reduce-child-poverty), and [Three policies to reduce child poverty this parliament](https://www.jrf.org.uk/child-poverty/three-policies-to-reduce-child-poverty-this-parliament)
- Resolution Foundation: [Catastrophic caps](https://www.resolutionfoundation.org/publications/catastophic-caps/)
2 changes: 1 addition & 1 deletion src/posts/posts.json
Original file line number Diff line number Diff line change
Expand Up @@ -30,7 +30,7 @@
},
{
"title": "How removing the two-child benefit limit would affect the UK",
"description": "Removing the two-child limit would cost £2.7 billion in 2026-27 and reduce child poverty by 16.2%.",
"description": "Removing the two-child limit would cost £2.8 billion in 2026-27 and reduce child poverty by 15.7%.",
"date": "2025-10-06 11:00:00",
"tags": ["uk", "policy", "featured"],
"authors": ["vahid-ahmadi"],
Expand Down
Loading