The two-child limit on benefits is leaving families in "acute hardship", Christian leaders have said.
The Child Poverty Action Group (CPAG) and the Church of England are calling on the new Labour government to abolish the controversial policy this year.
Under the current policy, benefit payments for most families are limited to two children for those born after 6 April 2017. Charities say this has resulted in families losing thousands of pounds a year for additional children born after that time.
Figures published by HM Revenue & Customs and the Department for Work and Pensions today reveal that the policy affected a record 1.6m children in the year to April 2024, up from 1.5m in the previous year.
A survey of 560 affected families by CPAG found that nearly half (45%) were struggling to pay their rent or mortgage because of the policy, while a similar proportion (46%) were finding it difficult to manage childcare costs.
Most families (93%) said the policy had affected their ability to pay for food, while 82% reported struggling to cover gas or electricity bills.
Some parents reported keeping children out of school because they could not afford basic items like shoes, while some mothers had been forced to cut their maternity leave short because they needed to work.
One single parent in full-time work said their child could no longer take GCSE PE because of associated costs.
"One of my children was on a pathway to play under 14's England netball team but had to stop, I just couldn't pay monthly fees and take them to training and games," they said.
One working mother said: "My number one reason for doing anything is my children, yet when I watch them queuing in a foodbank with me because I physically can't provide for them, I feel horrific, it makes you feel like an absolute failure."
Chief Executive of Child Poverty Action Group Alison Garnham said: "Children are losing their life chances to the two-child limit now – they can't wait for the new government to align every star before the policy is scrapped.
"The PM came to office pledging a bold, ambitious child poverty-reduction plan and there's no way to deliver on that promise without scrapping the two-child limit, and fast. This is not the time for procrastination or prevarication - the futures of 1.6 million children are on the line."
The Bishop of Leicester, Martyn Snow, said: "The testimonies in this report remind us that the two-child limit continues to affect the wellbeing and life chances of too many children and families in this country. Abolishing this unfair policy is essential if we are to turn the tide on poverty and ensure that every child is supported to flourish in all areas of life."
