What is the Benefit Cap?
The benefit cap limits the total benefits a working-age household can receive — £25,323 a year in London (£22,020 outside) for families, frozen since 2023 — mainly biting on larger families with high rents.
How it works
If a household's combined benefits — Universal Credit including housing support, child benefit and others — exceed the cap, UC is docked to the limit: £25,323/yr in Greater London, £22,020 outside for couples and single parents (£16,967/£14,753 for single adults). Working households earning above ~£846 a month escape it entirely, as do most disability-benefit recipients. In practice it falls on larger families in high-rent areas — the cap doesn't care what your rent actually is.
The argument it embodies
Supporters' case: no household on benefits should receive more than typical working families earn, and the cap preserves the incentive to work. Critics' case: the cap severs the link between assessed need and actual support — children in expensive areas bear the difference — and since it's frozen since 2023 while rents and prices rose, it cuts deeper every year without any announcement (the same quiet mechanism as fiscal drag, pointed at the poorest).
Why it matters now
Scrapping the two-child limit restores the child element to larger families — but for capped households the cap simply absorbs the gain, an interaction child-poverty groups are now campaigning on. Reform would reinstate the two-child limit; the Greens would lift the cap; Labour has left it frozen. Check the family-level arithmetic with the child benefit calculator.
Plain-English guide for general information only — not financial, legal or tax advice. Rates are 2025/26 unless stated. Last reviewed 5 July 2026.
Frequently asked questions
What is the benefit cap amount?
For 2025/26: £25,323 a year in Greater London and £22,020 elsewhere for couples and single parents; £16,967/£14,753 for single adults. The levels have been frozen since April 2023.
Who is exempt from the benefit cap?
Households earning over roughly £846 a month, and most receiving disability or carer benefits (PIP, Attendance Allowance, Carer's Allowance and others). The cap mainly affects out-of-work families with several children in high-rent areas.
Does the two-child limit removal help capped families?
Often not fully — restoring the child element pushes many households against the frozen cap, which then absorbs the increase. Campaigners argue the two policies have to move together for larger families to actually gain.