A recent IFS study finds the two-child benefit cap has little effect on early educational development, sparking debate over its role in child poverty and government policy shifts.
A recent study by the Institute for Fiscal Studies (IFS) has found that the two-child benefit cap, a policy introduced by the previous Conservative government, has no significant impact on the school readiness of children born after the policy’s implementation. The policy limits welfare benefits to two children per family, meaning families do not receive extra benefits for a third or subsequent child. The IFS research, which analysed data from approximately 90,000 children, concluded that children subject to the cap showed comparable levels of development at age five to those unaffected by the policy. Development assessments included communication and language, personal and social skills, physical development, literacy, and maths, all routinely measured by teachers at the end of the reception year.
This finding raises questions about calls from Labour figures, such as Education Secretary Bridget Phillipson, to scrap the cap, a move estimated to cost around £3 billion annually. Phillipson has characterised the cap as “spiteful” and noted its contribution to hardship for affected families, making its removal a central issue in her bid for Labour’s Deputy Leadership. The policy currently affects 1.6 million children and is under review by a child poverty taskforce as part of the government’s wider efforts to improve childhood outcomes and reduce poverty. Prime Minister Keir Starmer has committed to raising the proportion of ‘school ready’ children from 68% to 75% by 2028, and decisions on welfare policies like the two-child cap are integral to this agenda.
Despite the lack of evidence linking the cap directly to poorer educational performance, the IFS report highlights that the policy has made the benefits system considerably less generous for larger families. Families eligible for means-tested benefits in the first five years of a third or subsequent child’s life would typically see a reduction of about £18,300 in total benefits over that period. This reduction has contributed to increased child poverty rates. The IFS emphasises that while lifting the cap might not improve early educational outcomes significantly, it would be a cost-effective measure to reduce child poverty itself. Estimates suggest that removing the cap could lift 540,000 children out of absolute poverty at an annual cost of approximately £2.5 billion, although some of the poorest families might see their gains offset by other benefit limits, such as the overall household benefit cap.
Critics of the two-child limit argue that it contributes to hardship and pushes families into poverty, with some advocates calling for its abolition on moral and social grounds. However, the IFS study cautions that removing the cap is not a “silver bullet” for improving all childhood outcomes. Researchers also note that their analysis did not cover potential impacts on child health or parental stress, which might be affected by income changes resulting from the policy. Thus, while the educational measures of development appear unaffected, other dimensions of child well-being and family stability might tell a different story.
The Labour government is carefully weighing these factors as it considers whether to abandon the two-child benefit cap. The ongoing child poverty taskforce continues to assess the financial implications and societal benefits of such a policy reversal, balancing the goal of lifting children out of poverty with responsible fiscal management. Education Secretary Phillipson and other Labour leaders underscore the government’s commitment to tackling child poverty and improving life chances, signalling that welfare policy reforms, including potentially scrapping the two-child cap, remain firmly on the agenda.
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Source: Noah Wire Services
Noah Fact Check Pro
The draft above was created using the information available at the time the story first
emerged. We’ve since applied our fact-checking process to the final narrative, based on the criteria listed
below. The results are intended to help you assess the credibility of the piece and highlight any areas that may
warrant further investigation.
Freshness check
Score:
10
Notes:
The narrative is based on a recent report by the Institute for Fiscal Studies (IFS), published on 24 September 2025, indicating high freshness. ([ifs.org.uk](https://ifs.org.uk/publications/what-effect-two-child-limit-childrens-school-readiness?utm_source=openai))
Quotes check
Score:
10
Notes:
The direct quotes from Education Secretary Bridget Phillipson and Prime Minister Keir Starmer are not found in earlier material, suggesting originality. However, similar statements have been made in previous reports, indicating potential reuse of content. ([ifs.org.uk](https://ifs.org.uk/articles/there-are-good-reasons-reverse-two-child-limit?utm_source=openai))
Source reliability
Score:
10
Notes:
The narrative originates from the reputable Institute for Fiscal Studies (IFS), a well-established UK-based research organisation known for its rigorous analysis of economic and social policy.
Plausability check
Score:
10
Notes:
The claims align with existing research and policy discussions regarding the two-child benefit cap and its impact on child poverty and educational outcomes. The narrative is consistent with previous findings and current policy debates.
Overall assessment
Verdict (FAIL, OPEN, PASS): PASS
Confidence (LOW, MEDIUM, HIGH): HIGH
Summary:
The narrative is based on a recent and original report from a reputable source, with consistent and plausible claims. While some quotes may have been used in earlier material, the overall content is fresh and reliable.