A couple with two children now needs to earn £36,800 a year to have an acceptable standard of living, according to a new report.
The minimum income standard (MIS) study for the Joseph Rowntree Foundation has estimated that working families with children now have to earn nearly a third more than they did in 2008, twice the rate of inflation, to maintain a decent standard of living.
Soaring childcare and transport costs have combined with cuts to tax credits to hit working families hardest, with childcare the single biggest weekly outgoing, the report stated.
Any benefits that families have gained from the introduction of higher income tax thresholds have been more than cancelled out by cuts to tax credits, it said.
A single person needs to earn £16,400 a year to have an "adequate standard of living," while a lone parent with one child needs £23,900 and pensioner couples £231 a week, the charity calculated.
According to the research, around a quarter of the UK population live below the MIS, three million more than in 2008.
The MIS is calculated annually by Loughborough University for the charity, and takes into account what the public think people need to have an acceptable standard of living.
Julia Unwin, chief executive of the JRF, said: "Families have a monumental task trying to earn enough to get by. Parents facing low wages and pressure on their working time have little prospect of finding the extra money they need to meet growing household expenses.
"This year's research shows that a dangerous cocktail of service cuts and stagnating incomes are being keenly felt by parents. Many working people face the risk of sliding into poverty. It illustrates how anti-poverty measures are needed to address not just people’s incomes but also the costs that they face."
Donald Hirsch, co-author of the report, added: "People are being more modest in terms of what they think needs to be spent on participating in society, but this thrift has been outweighed by rising costs.
"Parents have not changed their view of most needs, including a nutritious diet and participation by children in activities vital for social inclusion. What has changed is the ability of many families to afford such essentials."
Chris Johnes, Oxfam's director of UK poverty added: "Yet again we are seeing evidence of working families being hit hardest by a perfect storm of soaring living costs and cuts to services and crucial support, like working tax credits.
"Millions of families are struggling to get by on dwindling incomes and even when both parents work full time they each need to earn 50 per cent above the minimum wage, in order to provide a decent standard of living for their kids."
