A new briefing published by Centre for London, in partnership with Trust for London and 4in10 London’s Child Poverty Network, finds that the government’s decision to abolish the two-child limit will benefit a maximum of 85,500 children in the capital – a critical first step towards tackling child poverty.

However, 700,000 children live in poverty in the capital. This leaves almost 9 in 10 families living below the poverty line still struggling, despite the reversal of the two-child policy.

London is one of the richest cities in the world, yet Centre for London’s data demonstrates that child poverty remains deeply entrenched:

• 1 in 3 children in London live in poverty
• In some boroughs, such as Tower Hamlets, almost half of children are living in poverty.

In December 2025, the government published its long-awaited Child Poverty Strategy. This reiterated its commitment to end the two-child policy, provided universal school meals schemes across the country, and looked to tackle the temporary accommodation crisis. Centre for London’s latest briefing analysed what this new strategy means for the capital.

The abolition of the two-child policy starting in April 2026 will put money in the pockets of tens of thousands of London households, a policy change worthy of celebration.

However, 7620 London children currently restricted by the two-child policy are already living in benefit capped households – meaning they will receive no additional financial aid following the abolition. This is set to rise as more families are pushed over the limit. While the benefit cap is still in place, the full impact of the two-child policy will not be felt by families.

Housing costs are the defining cause of child poverty in London

The benefit cap will affect families across the country. But in London there’s a unique driver of child poverty to contend with – housing costs.

Before housing costs are taken into account, the capital has a lower-than-average child poverty rate in comparison to the rest of the UK. Once housing costs are factored in, however, the child poverty rate doubles (or more) in 21 of the 33 London boroughs.

Half of London’s children living in poverty – around 300,000 – are growing up in privately rented homes. The average London rent is now £2,271 a month, significantly higher than the £1,422 England average. Put simply, the cost of private housing is pushing people into poverty.

To address this, Centre for London’s briefing calls for government to end the four-year freeze of the Local Housing Allowance (LHA). While LHA is meant to make the cheapest 30% of private rents affordable, in London it currently only covers 5%. Unfreezing LHA would ease housing pressures for low-income families.

London’s temporary accommodation crisis deepens child poverty

With private rents soaring, and the local housing allowance frozen, increasing numbers of families are turning to their local councils for help. Yet, many are waiting years to access permanent homes. The average waiting time for a family-sized social home in the capital is over five years – with some London boroughs reporting decades-long waiting times for three-to-four bed homes.

As a result, many families on the waiting list are placed in temporary accommodation – intended as a short term emergency solution, but often leaving families in unsafe, inadequate homes for indefinite periods. For the first time on record, there are more than 100,000 London children living in temporary accommodation according to London Councils. 

The government has acknowledged the scale of the crisis in their Child Poverty Strategy. It reiterates their work on an £8m pilot scheme set to reduce reliance on bed and breakfast accommodation in 20 boroughs, including several in London, while also committing to build more appropriate temporary accommodation.

Funding pressures on boroughs risk undermining progress

Temporary accommodation is also placing immense pressure on already stretched council budgets – costing £5.5 million every day in London.

The government’s child poverty strategy relies on support and delivery at a local level. As these new child poverty measures are rolled out, boroughs across the country will receive updated funding settlements, set through the government’s Fair Funding formula.

While some boroughs are set to benefit from this new calculation – for example, the London borough with the highest child poverty rate, Tower Hamlets, whose resources are set to increase by a third – other boroughs with similarly high child poverty rates will lose out.

Boroughs such as Islington, Camden and Southwark, where more than 2 in 5 children live in poverty, are among those set to lose funding in real terms.

For effective delivery of the Child Poverty Strategy, local government needs to be adequately resourced.

The creation of a Child Poverty Strategy, and first steps to provide financial support to boroughs are welcomed. But there’s a raft of additional measures required if the government hope to see progress on tackling child poverty in the capital.

Rob Anderson, Director of Research, Centre for London, comments below:

“The Government have made a major commitment to reduce child poverty, and its good news for London’s children that they have recognised the role of the housing crisis in child poverty.

It is shameful that more than 100,000 of London’s children are growing up in unsafe, unsuitable and unstable temporary accommodation. Some families lack access to kitchens, laundry facilities or reliable internet – making it harder to eat well, stay clean, or keep up with schoolwork.

Tackling child poverty will require coordinated action across London’s local and regional government, working closely with schools, the NHS and charities. Businesses can also help by offering decent pay and supportive working conditions for parents.

But London can only go so far without action by the Government to help the poorest families pay their rent, by raising the Local Housing Allowance and abolishing the benefit cap.”

Katherine Hill, Director, 4in10 London’s Child Poverty Network, comments below:

“Tackling child poverty is a complex challenge for which there is no single quick fix, we need London’s leaders to rise to this challenge and coordinate urgent action across the city to ensure all our children have the resources they need to thrive. Central to this effort must be the insight and lived experience of children, young people, and families affected by poverty; their voices must shape priorities, inform solutions, and drive action at every level.”

Manny Hothi, Chief Executive, Trust for London, comments below:

“The staggering number of children living in poverty in London is a stark and terrible representation of the challenges faced by millions in our capital. The decision to end the two-child limit as part of the Child Poverty Strategy is a welcome and crucial step forward, but it must be the start rather than the end of action. Real progress on child poverty in London depends on tackling housing costs, unfreezing Local Housing Allowance and ensuring councils have the resources to support families properly.”