Government austerity measures and inflation are pressing down hard on the living standards of poorer people in the UK, a survey by the Child Poverty Action Group has shown.

The stagnation in wages and the cuts in benefit increases have saddled low-income Britons with additional expenses, such as council tax. The increase in government benefits has been limited to no more than 1% per year, and in real terms actually dropped in 2012, for the first time since the 1930's, according to the report. Coupled with the rising prices of fundamentals such as food, utilities and public transport rates, the fight with deficit is squeezing the lower-income portion of the population disproportionately, especially in view of raising a child.

The report found that the cost of bring up a child from birth to 18 years rose by an annual 4% in 2012 to £148,105, against an increase in average wages of just 1.5%. According to the Child Poverty Action Group, government efforts should focus more on taking care of families and children rather than tackling the deficit without considering the adverse effects of austerity policies on the cost of living. Higher cost of living means lower spending power and lower capacity for saving for the future, the charity argues in its report.

Chancellor George Osborne has admitted that economic recovery is taking more time than was hoped, but noted the long-term effects of the policies that are now straining households.