New analysis by the UK Women’s Budget group reveals the scale of child poverty that could be ended in each nation of the UK by 2029/2030 if the two-child limit on Universal Credit were to be lifted in full. 

The findings come as Women’s Budget Groups across England, Scotland, Wales and Northern Ireland join voices to call on the Chancellor Rachel Reeves to fully abolish the two-child limit at the Autumn Budget.

New figures show the number of children in each nation that would be lifted out of economic hardship if the policy were to be fully scrapped:

• In England, 626,022 children would be lifted out of poverty.
• In Scotland, 51,036 children would be lifted out of poverty.
• In Wales, 54,722 children would be lifted out of poverty.
• Across Northern Ireland 9,791 children would be lifted out of poverty.

Current child poverty rates stand at 31% in England, 23% in Scotland, 31% in Wales, and 24% in Northern Ireland – with Scotland’s lower rate partly attributed to the Scottish Child Payment, a devolved policy that gives families direct financial support. The two-child limit is the primary driver of child poverty.

The organisations warn that partial reforms – such as lifting the policy only for working families or implementing a taper rate – would leave the most vulnerable children behind and undermine the Government’s child poverty strategy.

The societal costs of child poverty from greater unemployment, lower earnings and higher spending on public services is estimated to be £40 billion a year in 2027 for the UK. Lifting 650,000 children out of poverty could save £5.7bn in future societal costs – a higher saving than what it would cost to remove the policy.

 Dr Sara Reis, Deputy Director at the UK Women’s Budget Group, said: “No child’s future should depend on how many siblings they have. From Belfast to Cardiff, Edinburgh to London, the two-child limit is pushing families into poverty. Our analysis shows the difference one policy change could make in each nation. Ending it in full would give over half a million children a fairer start.

“Scotland’s Child Payment has helped bring poverty rates down. Giving families more money works. The Westminster government should learn from this and follow suit. The Autumn Budget is the moment to act – for every child, in all four nations.”

Hannah Griffiths, Coordinator of the Wales Women’s Budget Group, said: “The two-child limit is an unfair policy which penalises vulnerable women and children. With some of the highest rates of child poverty in the UK, the policy continues to have devastating effects in Wales where 11% of all children live in a family whose benefit payments have been restricted as a result.

“For women in Wales – who are more likely to rely on social security and to be single parents – the policy compounds existing gender inequalities, pushing them and their families into debt, poverty and hardship. For too long, women and children have borne the cost of a policy that deepens poverty and inequality. The time has come for the UK Government to abolish the two-child limit in full and provide the support that families across the UK truly need.”

 Alexandra Brennan, Coordinator of the Northern Ireland Women’s Budget Group, said: “If the Government is serious about tackling child poverty and other forms of poverty, scrapping the two-child limit in its entirety must be a top priority. 24% of children here are living in relative poverty and that’s an increase from 19% in 2021. And we know that children’s poverty is women’s poverty, as many mothers go without before their children do.

“Increasing the limit instead of scrapping it will have greater impacts here because statistically, families in Northern Ireland are larger. The answer is in the data – and the data shows that the two-child limit must be scrapped in order to lower child poverty.”

 Sara Cowan, Director at the Scottish Women’s Budget Group, said: “The Scottish Child Payment shows that putting money in families’ pockets is a critical route out of poverty. If the UK Government is serious about addressing the systemic barriers to child poverty, ending the two-child limit must be a top priority. 

“The data speaks for itself: social security is a crucial tool for lifting children out of poverty, restoring hope to families, and removing the burden of managing poverty that is often carried by women.”

The UK Women’s Budget Group is the UK’s leading feminist economics think tank, providing evidence and analysis on women’s economic position and proposing policy alternatives for a gender-equal economy. WBG acts as a link between academia, the women’s voluntary sector and progressive economic think tanks.

Image: c/o Labour Hub