Published by Global Banking & Finance Review®
Posted on November 11, 2025
2 min readLast updated: January 21, 2026
Add as preferred source on GoogleUK PM Starmer plans to reduce child poverty, possibly removing the two-child welfare limit. This change could lift 500,000 children out of poverty.
LONDON (Reuters) -British Prime Minister Keir Starmer said measures would soon be announced to reduce child poverty, possibly hinting that the government will scrap a two-child limit on welfare payments to parents in its November 26 budget.
Reversing the two-child cap, which prevents most parents from claiming welfare payments for more than two children, would cost around 3 billion pounds ($4.03 billion) per year, according to the Institute for Fiscal Studies (IFS).
Previous research by the IFS suggested that scrapping the cap could lift 500,000 children out of absolute poverty.
Starmer told ITV's Lorraine show in comments aired on Tuesday he was determined to drive child poverty down.
"You won’t have to wait much longer to see what the measures are," he said.
In another signal that the policy could be changed, his finance minister, Rachel Reeves, said on Monday it was wrong for a child to be penalised because they are born into a bigger family.
Last week, the Times newspaper reported that Reeves told the budget watchdog that a rise in personal taxation is among the "major measures" she is preparing to announce in her budget.
($1 = 0.7451 pounds)
(Reporting by Sarah Young, editing by Elizabeth Piper)
Child poverty refers to the condition where children live in families with income levels below the poverty line, affecting their access to basic needs such as food, shelter, and education.
The two-child limit is a policy that restricts welfare benefits to families with two children, meaning families cannot claim additional benefits for any children beyond the second.
Absolute poverty is a condition where an individual or family lacks the financial resources to meet basic needs for survival, such as food, clothing, and shelter.
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