A further 250,000 children will be affected by the two-child benefit cap next year, rising to an extra half a million by 2029, a leading think tank has warned.
The Institute for Fiscal Studies (IFS) said the number of children who will fall under the cap – which limits child benefits to the first two children in most households – will reach 670,000 by the end of the next parliament if the policy does not is reformed.
The two-child benefit cap, which restricts Child Tax Credit and Universal Credit to the first two children, was introduced by the Conservative government in 2017.
Activists have long called for its abolition, claiming it would lift thousands of children out of poverty.
A separate study by the Joseph Rowntree Foundation (JRF) found that 40% of people working in primary schools and doctors’ surgeries considered leaving their jobs due to a “disgraceful” level of hardship among the population.
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The JRF concluded that service providers were “reeling under the weight of hardship” as they had to provide extra support to the almost four million people struggling to pay for essential goods including food, heating and clothing.
The IFS said the two-child limit helped increase the percentage of children in large families who are in relative poverty, from 35% in 2014-15 to 46% in 2022 – a period when poverty for families with one or two children fell.
The Labor Party faced pressure remove the cover – including former Prime Minister Gordon Brown – but there is has so far refused to commit to ending itciting the current state of the country’s finances.
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Pressure intensified further after right-wing figures, including former home secretary Suella Braverman and reformist leader Nigel Farage, called for the cap to be scrapped.
The abolition of the limit does not appear in either the Conservative or Labor manifestos, with only the Green Party and the Liberal Democrats making the commitment in their offers to the public.
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The IFS said removing the cost of the cap would cost the government around £3.4 billion a year, the equivalent of fuel freeze rates for the next parliament.
The limit currently affects two million children and more children are added each year because it applies to those born after April 5, 2017.
The IFS said that when fully implemented, the cap will affect one in five children, rising to 38% of those living in the poorest fifth of households.
It said that 43% of children in households with at least one person of Bangladeshi or Pakistani origin will be affected, while those in this situation will lose, on average, £4,300 a year – representing 10% of their income.
IFS research economist Eduin Latimer said: “The two-child limit is one of the most significant welfare cuts since 2010 and, unlike many such cuts, it becomes more important every year as it is implemented for more families.”
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Mubin Haq, chief executive of the abrdn Financial Fairness Trust, which funded the research, said: “The cap has contributed significantly to child poverty among large families during a period when poverty for families with one or two children has fallen.
“If the next government is serious about combating child poverty, it will need to review the two-child limit.”
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Alison Garnham, chief executive of the Child Poverty Action Group, said the “biggest driver” of child poverty in the UK is the two-child limit.
“Any government that seriously wants to improve things for the next generation will have to eliminate the two-child limit, and do it quickly.”
A Labor spokesman said: “We are under no illusions about the scale of the task ahead if we win the election.
“Labour has already set out how we could start, with free breakfast clubs in every primary school, reducing energy poverty and reducing energy bills, banning exploitative zero-hours contracts, making work pay, ending unpaid evictions guilt and creating more good jobs across the country.”
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