50,000 more families hit by benefit deductions after two-child cap removed

Around 370,000 children are living in households facing a government-imposed cap on benefit income, official figures show, as experts warn many are being pushed into deep poverty.

New data from the Department for Work and Pensions (DWP) has revealed that 165,000 families are being hit by the benefit cap, taking an average £80 from their entitlement.

The policy limits the amount that households claiming Universal Credit can receive from the DWP.

The latest figure marks an increase of 53,000 families from February 2026 – a 48 per cent rise. The DWP says that the rise reflects the removal of the two-child benefit limit and this year’s above-inflation increase to basic Universal Credit levels, which has boosted awards.

The benefit cap was last raised in 2023, to £1,835 a month for most couples or claimants with children, or £22,020 a year. In Greater London, it is £2,110.25 a month, or £25,323 a year.

It remained frozen in 2026/27, marking the fourth year it will not rise in line with inflation, with no plans announced to increase it with inflation as is the case for most benefits.

There is a statutory obligation on the government to review the cap every five years, with the next review being due in November 2027. Ministers are able to review it at any point.

The figures come after DWP analysis released earlier this year found that removal of the two-child benefit limit would see 50,000 families see no income uplift at all, as they were already at the cap. The limit was removed in April 2026.

A further 20,000 were set to only see their incomes lift partially due to the policy, the research added.

Iain Porter, senior policy adviser at JRF, said: “The government can act quickly to help children experiencing very deep poverty. Children should not be going without essentials because the Government is taking away support their families have already been assessed as needing.

“The basic rate of Universal Credit for a single adult aged 25 or over is just £98 a week, already well short of what is needed to afford essentials like food and energy. Debt repayments and the benefit cap can pull that support even lower, leaving families facing the deepest hardship.

“For a child, very deep poverty can mean wearing shoes that no longer fit, going to school hungry or coming home to a cold house.”

The policy expert reiterates the charity’s call to create a protected minimum floor within Universal Credit to limit how much payments can be reduced by the benefit cap.

A DWP spokesperson said: “Removing the two-child limit is just one way we’re tackling poverty, through measures such as Free School Meals, expanding childcare and a £1bn Crisis and Resilience Fund we’re creating systems which will help prevent families from falling into poverty in the first place.

“The benefit cap is a targeted, proportionate measure that encourages personal responsibility while maintaining a strong safety net for those who need it most. It strikes an appropriate balance between targeted support and clear incentives for people to move into work, helping us move from a welfare state to a working state.”