Families affected by the two-child limit say they’re experiencing financial hardship, few opportunities to learn and play and poor mental health, according to qualitative research published by the innovation charity Nesta.

Whilst much previous research has focused on whether the policy affects family size decisions, employment and financial hardship - this new report examines how the policy might be affecting parenting, and children’s development.

The research is based on 35 interviews with parents affected by the two-child limit in England. The two-child limit was introduced in 2017 and changed the eligibility criteria for universal credit and tax credit allowances. Under the policy families no longer qualify for support for their third and subsequent children.

The report, ‘Lost Opportunities’, features parents’ perspectives on the experiences of their younger children (affected by the policy) - including access to early education and childcare, financial security within the family and emotional wellbeing.

The findings paint a picture of families struggling with severe financial constraints - finding it hard to afford basic necessities, eat well and give children valuable and rewarding life experiences.

Beth, a mother of five, employed part-time and with one child affected by the 2CL, summarised what the lack of ‘extra help’ from the 2CL means for her family:

“It [the 2CL policy] has had a big impact on our family. They haven't been able to access things that maybe they would've if we had got that extra help. Even down to their diet, like to have fresh fruit and vegetables every day, to give them their five a day, it's very expensive. Our shopping bills had to be cut down. They just haven't had as many experiences that I would've liked them to have. It's kind of like we've gone into poverty now.”

Allyson, a lone parent of four employed part-time, with one child affected by the 2CL, said:

“Normally when I was on Tax Credits I would be able to go and get my weekly shop, I now have to do a monthly shop and you know what kids are like. By the time the first week is over there’s no food left. So it’s just crazy, like, having to buy in bulk and then everything is finished. It’s like being a pauper.”

Parents said their younger children have fewer opportunities than was the case for their older siblings, with a lot less money for both enjoyment and developmental opportunities via toys, books, games and extra-curricular activities.

Maira, a parent of four children with two affected by the 2CL, said:

"My older two children were able to get more access to clubs and stuff like that so they are a bit more extroverted [...] with the younger two you can see that they're more – how can I explain it – they're more introverted as in like they're just more kept to themselves a bit more in that sense. Because they do not get the extra support on the things they want to do or play with, they are just more lacking in skills from my sense of what I could do as a child.”

Families affected by the policy also said that debt is a growing problem as they try to make ends meet, creating a stressful home environment. Caro, a mother of four on maternity leave, with one child affected by the 2CL, said:

“I think [the 2CL] it's caused a lot of people to have debts, which they don't really need because you still have to feed a family […] if you have that financial help or well, however small it is, you know that you have help towards a child, it will limit you going into debt, and also help people improve their credit, like your possibility of borrowing when it's really needed, but now you're borrowing because you're trying to manage the situation.”

Louise Bazalgette, Deputy Director of Nesta’s Fairer Start team said: “The lived experience of families affected by the two child limit paints a grim picture. The parents we talked to are struggling to keep their head above water financially and carry the guilt and emotional stress of feeling like their children are losing out on opportunities. Crucially our research suggests that children affected by the policy may receive less investment in their early childhood development and we know this is a loss that affects young people’s life chances into adulthood.”

In the next phase of the research, the IFS will analyse outcome data gathered in children’s reception year of school in order to investigate whether there is quantitative evidence of a relationship between children being affected by the 2CL and poorer outcomes at age five.

Notes for editors

• For more information on the research or to speak to one of the experts involved, please contact Mark Byrne, Head of Media, on 07745234909 or [email protected]

About Nesta

We are Nesta, the UK's innovation agency for social good. We design, test and scale solutions to society's biggest problems. Our three missions are to give every child a fair start, help people live healthy lives, and create a sustainable future where the economy works for both people and the planet.

For over 20 years, we have worked to support, encourage and inspire innovation. We work in three roles: as an innovation partner working with frontline organisations to design and test new solutions, as a venture builder supporting new and early stage businesses, and as a system shaper creating the conditions for innovation.

Harnessing the rigour of science and the creativity of design, we work relentlessly to change millions of lives for the better. Find out more at nesta.org.uk