Martin Lewis explains two child-benefit scrap from April | Personal Finance | Finance

Martin Lewis has issued an update to UK households to explain the scrapping of the two-child benefit cap – and why it’s not the same as the child benefit.

On Wednesday, Chancellor Rachel Reeves confirmed in her Autumn Budget that the government will axe the two-child benefit cap, which was recommended to lift more children out of poverty.

Confusingly, the two-child benefit cap is not the same as  Child Benefit, which is a specific payment given to families to help meet the cost of raising children, set at about £26 per week for the first child and £17 per week for each additional child – with no cap on the number of children it will pay out for.

As Martin Lewis took to Twitter to explain, it is ‘nowt to do’ with Child Benefit, and instead pertains to the overall limit on benefits for people with children.

Martin said: “Government announced it’s ending the two-child benefit limit, but there’s a lot of confusion about what it is. So here is a bit of a primer… 

“1. It is nowt to do with Child Benefit, a universal payment for every child you have (clawed back from higher earners)

“2. The two-child benefit limit, often wrongly called a cap, means those who get Universal Credit (a benefit for those in and out of work on lower incomes) won’t get any additional benefit if they incur extra costs because they’ve more than two children. This is what is being scrapped in April, so they will get more benefits if [there are] extra costs from more children.

“3. Separately there is also a Benefits Cap – which, in simple terms, is a max amount you can get on benefits (including Universal Credit and Child Benefit). The cap for families, couples and single parents is £1,835/mth. It’s more in Greater London. So there you go. You’ve got Child Benefit rules, the two-child limit for Universal Credit and Tax Credits, and a benefits cap. There are lots of ifs and buts. I hope that helped clear it up a bit.”

The government said about the removal of the two-child limit: “The historic decision to remove the two-child limit in full from April 2026 will lift 450,000 children out of poverty – rising to around 550,000 alongside other measures announced this year, such as the expansion of free school meals – the biggest reduction at any Budget this century.

“This comes after this government has already rolled out free breakfast clubs to half a million more children.”