Poverty costs the UK a staggering £78bn ($103bn, €92bn) per year and the leaves the average taxpayer around £1,200 a year worse off, according to the Joseph Rowntree Foundation (JRF). The charity, drawing on research by Heriot-Watt and Loughborough Universities, estimated that £69bn of all spending on public services is needed because of the impact and cost poverty has on people's lives.

The £78bn figure – equivalent to 4% of the UK's GDP – is met by including £9bn in lost tax revenues and additional benefits spending. The JRF identified health care as the largest amount of the spending, with £29bn spent every year spent treating health conditions associated with poverty.

"This is enough to pay the salaries of 126,000 nurses, and is almost equal to the £30bn shortfall which the NHS has said will appear by 2020. The £29bn makes up 25% of all health spending," the charity said.

Julia Unwin, chief executive of the Joseph Rowntree Foundation, branded the poverty situation in the UK as "unacceptable". She added: "Poverty wastes people's potential, depriving our society of the skills and talents of those who have valuable contributions to make.

"This drags down the productivity of our economy, hinders economic growth, and reduces tax revenue. Taking real action to tackle the causes of poverty would bring down the huge £78bn yearly cost of dealing with its effects, and mean more money to create better public services and support the economy.

"UK poverty is a problem that can be solved if government, businesses, employers and individuals work together. If we fail to do so poverty will create an even bigger risk to our country today, and for future generations."

Professor Donald Hirsch, from the Centre for Research in Social Policy at Loughborough University, said: "It is hard even to estimate the full cost of poverty, not least its full scarring effect on those who experience it.

"What our figures show is that there are very large, tangible effects on the public purse. The experience of poverty, for example, makes it more likely that you'll suffer ill health or that you'll grow up with poor employment prospects and rely more on the state for your income."