The good news is the ending of the two-child benefit cap. The less good news is that a frozen benefit cap means that many will lose half of what they stand to gain. Frozen Local Housing Allowance is also going to negatively impact renters. But the really bad news is massive cuts facing new disabled claimants, which will affect hundred of thousands of people. Add to that a rise in the pension age, and there is little sign that these changes will help ordinary people who are already facing an intensifying cost of living crisis.

Single parent households lose half of what they gain to benefit cap after two child-limit ends, finds WBG

From Monday 6th April, the two-child limit policy on Universal Credit and Child Tax Credit support has been lifted. This means that low-income families can claim universal credit payments for all children living in their household. It’s a welcome step, the result of tireless campaigning by activists and backbench rebellions by Labour MPs who lost the whip as a result. But there is a hitch – much of the support could be clawed back.

Erin Mansell, Deputy Director at the Women’s Budget Group commented: “The abolition of the two-child limit marks the end of a policy that deepened hardship for the poorest families and imposed the horrific requirement on women to prove they were raped in order to qualify for an exemption.

“For some of the poorest households, especially those headed by single mothers, that relief will be partial and short-lived. The government’s own impact assessment shows that around 60,000 families will see some or all of their newly available support clawed back by the benefit cap. Single parents – most of whom are women – make up nearly 70% of families affected by the cap, because balancing paid work with caring responsibilities is a far harder juggling act than for dual-parent households.

“As a result, we estimate that on average single mothers who benefit from the lifting of the two-child limit will lose around half of what they gain because of the benefit cap, limiting its impact on lifting children out of poverty.

“Women are already more likely to skip meals or fall into personal debt just to cover daily living costs. The war in Iran has caused severe disruptions to fuel supplies, driving up oil and gas prices, with knock-on effects for food and other everyday goods expected to follow. At the very least, the benefit cap must be uprated in line with inflation, as some of the poorest families are currently facing a real-terms cut in support while continuing to struggle with the cost of living crisis, but ultimately the cap should be scrapped.”

WBG analysis shows that on average, single-mother households will see an increase in their annual income of £735 in 2029/30 as a result of the lifting of the two-child limit. If the benefit cap had been abolished along with the two-child limit, this increase would have been £1,800, over twice as much, or a 9% rise in disposable income.

Frozen LHA – and huge cuts to disability benefits

The benefit cap is not the only thing to be frozen. Local Housing Allowance rates stay the same this year, not uprated in line with inflation. This will make housing even less affordable to those on low incomes. As support continues to diverge from private rents, more families will fall into rent arrears.

Worst of all is the change to benefits for disabled people. The Limited Capability for Work Related Activity element of Universal Credit will halve from £423.27 a month to £217.26 for new claimants, except those with a lifelong severe condition. As well as a staggering cuts in benefits, this tiered system of support is doubly unjust because the rate will now be based on the claim date rather than any assessment of need.

The £5bn worth of cuts to disability benefits, designed by Keir Starmer’s Government to ‘incentivise’ disabled people to get back to work, could push people into destitution, many charities believe. Almost three-quarters of a million of the most severely ill and disabled people in the country could end up having a lifeline benefit cut in half – a figure based on the Government’s own data, as Frances Ryan pointed out in the Guardian this month.

In October, the Labour-led House of Commons Work and Pensions Select Committee called the Government’s universal credit cuts act “discriminatory” and warned that it will push disabled people into poverty. Yet every one of its Labour members voted for the legislation in July 2025. The Government has dismissed the Committee’s concerns.

Labour MPs rebelled over welfare cuts last year but for most of them that rebellion stopped at the Personal Independence Payment element, keeping the Universal Credit cut intact. “However, a minority of Labour MPs rightly went on to vote against the full package,” noted Keir Starmer’s former Strategic Campaigns Adviser Simon Fletcher.

The Government could cut corporate welfare, collect taxes dodged by the wealthy and tax the rich more, but the vulnerable are far easier targets, Labour peer Prem Sikka said.

Work longer, increasingly in ill health

The age at which millions of people can claim their state pension also starts to rise to 67 today. The Government’s justification is that life expectancy is rising. The only problem is: it’s not. The Government’s own figures show that healthy life expectancy has fallen to its lowest level for over a decade and the regional disparity between, for example, the South East and the North East, is growing. At a local level, differences are even more stark. There is almost 20 years difference between the healthy life expectancy for people in the wealthiest and poorest places.

“Millions will struggle to work,” commented Prem Sikka on the change to the pension age, pointing out that the poor have shorter lives and receive their pensions for fewer years, whereas the rich live longer and receive their pensions for a longer period.

Image: https://www.picpedia.org/chalkboard/b/benefits.html License: Creative Commons 3 – CC BY-SA 3.0 Attribution: Alpha Stock Images – http://alphastockimages.com/ Original Author: Nick Youngson – link to – http://www.nyphotographic.com/