Our statement – 2025 Autumn Budget

The Childhood Trust’s statement on the scrapping of the two-child benefit cap announced in the 2025 Autumn Budget 

We share the Chancellor’s belief that every child “deserves an equal chance” and that child poverty remains the “biggest barrier” to achieving this. The removal of the two-child limit will provide significant relief for many families, but much more is needed to meet the Government’s goal of delivering “the biggest reduction in child poverty since records began.” 

While the change is expected to put an additional £5,300 per family per year into household incomes on average, its impact will be deeply uneven, especially in London and among families already in deep poverty. 

A Look at London 

In London, 36% of children live in relative poverty, rising to over 45% in several boroughs (GLA, 2024). Despite being one of the wealthiest cities in the world, high housing costs and the rising cost of living mean that London has both a higher child poverty rate and a higher deep-poverty rate than the UK average (Poverty Strategy Commission; GLA). 

While the abolition of the two-child limit is a welcome lifeline, for thousands of London families this lifeline will be cut short immediately by the Benefit Cap. 

London families with more than two children who already receive the maximum £25,323 in benefits will not be eligible for any further payments and therefore not see the positive financial impact of the removal of the two-child benefit cap.  

The principle driving factor in poverty in London is the disproportionate income-to-rent ratio. ONS statistics report the average private rental rate is 65% higher in London than the rest of the U.K., while the average wage in London is only 30% higher. The benefit cap is 15% higher in London. A shortfall all round.  

Right now, 700,000 children in London are growing up without the warmth, safety, nutrition and opportunity every child deserves. Recent investigation by the Children’s Commissioner described some children’s living conditions as “almost Dickensian” - conditions driven not only by financial hardship, but by stigma, instability, and the daily erosion of dignity. 

Bridging the Gap That Remains 

The removal of the Two-Child Limit is a significant step forward. However, policy changes take time to translate into lived impact, and the Benefit Cap will continue to prevent many families from receiving the support they are entitled to. 

This is more than just a financial gap. We call this the Dignity Gap: 

• the gap created by unsafe or unstable housing; 

• by hunger, isolation, and anxiety; 

• by exclusion from opportunities; 

• the gap between what every child deserves, and the harsh reality many still face. 

Our Role with Your Support 

Frontline charitable services remain essential. Through our direct community outreach programme and our support for more than 150 partner charities, The Childhood Trust will continue to restore children’s dignity and wellbeing by: 

• transforming bedrooms and home environments; 

• providing food, after-school activities and holiday programmes; 

• strengthen mental health support; 

• create safe, stable environments where children can thrive. 

What’s Next for Policy?  

As we look ahead to the Government’s forthcoming Child Poverty Strategy, The Childhood Trust supports the Poverty Strategy Commission’s recommendations, including: 

• automatic free school meals for all eligible children; 

• a call on all employers to pay a real living wage; 

• expansion of affordable housing and childcare; 

• introduction of a Benefit Floor to prevent households being pushed into deep poverty. 

We urge the Government to turn this positive first step into a decisive strategy to end child poverty and close the financial and Dignity Gap for every child.