QoD, you are in an abusive relationship.
He is destroying you and your children. You are NOT over-reacting. Tbf, you are under reacting, but it's understandable.
Getting him out of your life is the ONLY option that will improve things. The idea of separation is harder than the actual action. TRUST ME. As soon as you are away, it starts getting better. When he is out of your life, at least the day to day stuff, at least there is HOPE. Right now, there is none. Not a chance of what you are living getting any better at all. It won't. Not EVER. It will only ever get worse and worse.
Counselling is a NO-NO, never EVER should you agree to counselling with an abuser, he will only use it to gang up on you and inflict more damage and pain on you and the DC.
The first thing you need to do is recognise that none of this is any of your fault. He is choosing to do this to you, he feels entitled to bully and abuse you like this. he could technically stop tomorrow, but he won't. EVER.
Get yourself informed. Go and see the CAB, go to the benefits people and tell them that you need to claim for you and you only, and that your P is taking all your money from you.
Call Woman's Aid, tell them what you have told us, they will help you when the time comes. Go and see your GP, you will eventually need referral for counselling services, your children too may need help to recover from this abuse. Tell as many people as you can. You need to establish a paper trail. The more people that know the truth, the more people will help you, and you will be protected from him if he tries to get nasty wrt access to the DC.
Time to be strong, brave and go into battle. You are saving your DC from a life of this, look at the posts here from those whose mum never got out. See what happened to them and their siblings.