Chancellor Rachel Reeves is preparing to announce a major overhaul of the Universal Credit system that could leave hundreds of thousands of families significantly better off each month.
What the Universal Credit changes mean for families
The centrepiece of the reform is the expected scrapping of the controversial two-child benefit cap, a policy that has faced mounting criticism from anti-poverty campaigners and Labour MPs alike. This significant welfare shift is anticipated to be revealed during the Budget on November 26.
Under the current system, parents can only claim Universal Credit support for their first two children. This means larger families have been forced to stretch their existing benefits to cover all children in the household, creating what critics describe as a cruel penalty for having more children.
Financial impact of removing the cap
The child element of Universal Credit is currently worth £292.81 per child each month for children born after April 2017. Removing the two-child limit would therefore have a substantial impact on household budgets.
For a family with four young children, the policy change would mean an additional £586 in monthly support under current payment levels. Many households across the UK could find themselves hundreds of pounds better off each month if the changes proceed as expected.
Growing pressure to address child poverty
The government has faced intensifying pressure from its own MPs and child poverty organisations to eliminate the cap, which campaigners argue keeps millions of children in poverty. Recent data shows that one in nine children now live in households affected by this policy.
Joseph Howes, chair of the End Child Poverty Coalition and CEO of Buttle UK, recently stated: "The Government's 'moral mission' to end child poverty will fail if this policy remains. No child poverty strategy will succeed in lifting kids out of poverty if this policy remains."
The anticipated announcement represents a significant victory for campaigners who have long argued that the two-child limit contradicts efforts to reduce child poverty across the United Kingdom.
