Budget 2025: Two child limit scrapped, but tax threshold freeze and pension changes will hit workers
Housing Plus Group's debt and energy manager Dan Bebbington shares his insight into the Chancellor's Budget.
Dan Bebbington, debt and energy manager at Housing Plus Group, said:
"Scrapping the two-child limit for households claiming Universal Credit will help many families struggling with the cost of living. It will ensure children are no longer disadvantaged simply because of family size, and provide much-needed breathing space for parents managing tight budgets.
"However, Universal Credit will still be subject to the overall benefit cap, as Child Benefit counts as income. In some cases, this could mean families may see little or no financial gain from having additional children added to their claim. For households outside London, the maximum amount of benefits a family can receive is £1,835 per month - unless they meet the required work threshold or receive certain exempt benefits.
“Scrapping the two-child limit for households claiming Universal Credit is a welcome relief to lower-income families struggling with the cost of living.
"It will lift hundreds of thousands of children out of poverty over the next few years, ensuring they are no longer disadvantaged simply because of family size, and provide vital breathing space for parents managing tight budgets.
"The rise in the national living wage to £12.71 per hour will put more money directly into the pockets of working people, though it's still below the £13.45 that the Real Living Wage Foundation says people need to earn in order to meet the current cost of living.
"However, extending the current tax thresholds freeze means many households will have less money in real terms due to fiscal drag. As wages rise, more people will be pulled into higher tax bands, reducing the benefit of pay increases and leaving us with less disposable income. Coupled with the introduction of National Insurance contributions on salary sacrifice pension contributions over £2,000 a year from 2029, many workers will be left feeling let down by today's Budget.
"I am however pleased to see action being taken at last to bring energy bills down. Energy costs remain one of the biggest burdens for households we support, and any reduction will make a real difference.
"Overall, there are certainly things to be positive about, but huge challenges remain. At Housing Plus Group, we see daily the impact of the rising cost of living on our customers, and we welcome measures that reduce financial stress and improve people's quality of life.
"We encourage anyone worried about how these changes affect them to seek advice and support."
26th November 2025