Families on low incomes in Britain will have their access to welfare payments cut over the coming years, chancellor George Osborne announced today as part of budget aimed at rebalancing public finances through deep spending reductions.

Osborne said he would freeze working-age benefits for four years and raise the thresholds at which Britons can access the country's expensive tax credits system, designed to top up the earnings of those on low incomes.

"The whole working age benefit system has to be put on a more sustainable footing," Osborne told parliament.

He also said the government would in future limit to two the number of children for whom new families could claim welfare payouts.

"It’s important to support families, but it’s also important to be fair to the many working families who don’t see their budgets rise by anything like that when they have more children," he said.

The welfare reforms announced on Wednesday are expected to save the 12 billion pounds which Osborne says he needs to meet a revised target of eliminating the budget deficit by the 2019/20 financial year.

Under previous plans, total expenditure on social security payments was forecast to reach 218 billion pounds in 2015/16, of which 30 billion was on tax credits.

The tax credit system was introduced in its current form under the opposition Labour Party during their 13-year spell in power from 1997 to 2010 as a means to supplement the earnings of low-paid workers, particularly those with children.

Osborne has previously criticised the cost of the system, which has risen sharply from 1.1 billion pounds since it was launched.