The total economic impact of child poverty on Britain is around £25 billion every year, according to new research from the Joseph Rowntree Foundation (JRF).

By combining two "cautious" economic calculations – increased state spending due to poverty, and reduced economic activity through lower earnings later in life – the charity estimates that the UK is suffering substantial economic damage through not properly tackling child poverty.

The assessment of three previous studies found that child poverty accounts annually for £12 billion of extra social spending on areas such as health and education, £11 billion lost due to lower incomes, and £2 billion in benefits due to unemployment.

"Child poverty imposes huge costs on those affected but it is also costly to us all. Getting rid of child poverty will not be cheap. But this report shows that large amounts are being spent on paying for the fallout from child poverty," said Donald Hirsch, JRF poverty adviser.

"This could be more productively employed in preventing it from occurring in the first place. Tackling child poverty would bring a double benefit – for the families whose life chances and quality of life would be improved and for society, which would no longer have to pay such high costs of picking up the pieces."

UK Government efforts such as the tax credits system have been credited with alleviating child poverty to a degree, although some experts argue that the existing benefits structures prove a disincentive to increased economic activity and savings.

The report's publication also follows a warning from the Scottish Campaign on Welfare Reform that welfare reforms could exacerbate poverty in some areas by treating individuals "in a punitive and undignified manner".