Colchester Foodbank and MP react as two-child benefit cap ends

Chancellor Rachel Reeves announced in her budget today the cap on the two-child benefits limit will end from April 1, 2026.

The two-child limit – which first came into effect in 2017 – restricts child tax credit and universal credit to the first two children in most households.

Organisations working in the sector argue 109 children across the UK are pulled into poverty by the policy every day.

The end of the cap will result in an estimated reduction of child poverty by 450,000 by 2029 to 2030 according to the government’s independent spending watchdog.

Donations - Irma Stevens of 1 Stop Healthcare (left) and Nikki Ranson of Colchester Foodbank (Image: Submitted)

In Colchester, 2,870 children were affected by the two-child limit in April 2025 – 11 per cent of the city’s children.

The policy will cost the taxpayer about £3 billion, which with the previously planned winter fuel payments cost will leave an additional £7 billion welfare bill.

Colchester Foodbank had a slight increase in referrals in the past year for referrals for children using the food bank – including several from schools.

Nikki Ranson, Colchester Foodbank co-director, said: “The lifting of the two-child cap benefit is massive, we are so genuinely happy about that.

“It will make families we see, and would potentially see, lives a lot easier, maybe they might not need the food bank anymore because of that.

“At the same time, we know when there’s a good change there is a bad, we are very mindful with the new tweaks on disability benefits, they are going to be adjusted, will put pressure on another family.

“We are cautiously optimistic, many families will benefit overall, and some people are aware they will need the food bank and other support.”

Ms Ranson said as well as increase to children and families, there had been an increase in elderly referrals.

This was primarily due to the original winter fuel payment cuts which were reversed in January.

This means all pensioners with an annual income of £35,000 or less for the 2025 to 2026 winter will receive the fuel payment – with optional payments reclaimed above this through tax.

Ms Ranson said the food bank had seen an increase in numbers in the past months and are expecting a slow increase of referrals over the winter period.

Abmition - Pam Cox previously told the Gazette it was her ambition to pull children out of poverty like the last Labour government did with 2.2 million children (Image: Roger Harris)

Pam Cox, Labour MP for Colchester, said as well as the two-child benefit cap being lifted, people have benefited from prescription charges being frozen, and a £150 cut to average household energy bills from April.

Ms Cox said: “This budget shows Labour in government is delivering on its promise to make life fairer and more affordable.

“Scrapping the two-child benefit cap is a landmark decision that will help thousands of families in Colchester and across the UK.

“Combined with freezing prescription charges and transport fares, and cutting energy bills, these measures will make a real difference to household budgets at a time when people need it most.

“For too long, families have been punished by policies that deepen poverty and inequality. Today’s announcements mark a decisive break from that approach and put compassion and fairness back at the heart of government.”