Ending the two-child limit could give some couples the financial space they need to leave unhappy relationships. The recent budget announcement scrapping the policy has been widely welcomed for its potential to lift hundreds of thousands of children out of poverty.
The change is especially significant for the UK’s two million single-parent households, who are currently twice as likely to experience poverty as couple-parent families. Although many government policies implicitly favour two-parent households, removing the two-child limit offers real support to those facing the process of divorce and its aftermath.
Research indicates that the average cost of separation in England and Wales can deplete savings and push newly single parents into financial difficulty. For separated families with three or more children, ending the two-child limit could be transformative. Around 560,000 families are expected to benefit, receiving about £3,500 more for each third or subsequent child. Government estimates suggest that around 450,000 children could be lifted out of poverty. For families already grappling with the financial aftermath of divorce, this additional support may be the difference between being able to afford essentials – such as food, heating, and school shoes – and going without.
It is one of the most significant child-poverty interventions introduced in recent years.
However, major gaps remain. The benefit cap has not been lifted, meaning some of the lowest-income single-parent families will see little or no change. Estimates suggest that one in 10 children affected by the two-child limit will not benefit at all, and another one in 10 will only see a partial increase because the cap cuts off additional support.
On top of this, frozen tax thresholds are pulling more low-paid parents into taxation, childcare in school holidays remains prohibitively expensive, and housing costs continue to absorb a large share of income. In many ways, removing the two-child limit is like turning on the tap while still keeping a hand on the stopcock.
The budget also failed to address child maintenance and co-parenting support – despite clear evidence that fully paid maintenance could lift up to 60% of children in separated families out of poverty. Tens of thousands of children still receive nothing through the “collect and pay” system each quarter, and fees often reduce the money that actually reaches children.
There was also no new investment in early-help services for separating couples, despite the significant benefits these services bring: preventing communication breakdown, helping maintenance continue, and stopping families from falling into deeper financial trouble.
So while the budget provides more money through the benefits system, it does not resolve a key issue: too much child maintenance never reaches the children it is intended for.
Ending the two-child limit will undoubtedly offer vital support to single-parent households – especially those working to regain financial stability after divorce. But much more reform is needed. Supporting couples to separate more amicably can reduce pressure on the welfare system. As policymakers look for ways to address the deficit, helping families navigate separation in a healthier, more cooperative way should be high on the agenda.
