For just pounds 15 a week more, millions of poverty-stricken families which fight a constant battle to make ends meet could be saved from such misery, it concludes.
Around 14 million adults and children now live in households whose net incomes are half the national average. The report, Life on a low income, comes just 12 months after an inquiry set up by the foundation revealed that the gap between rich and poor had grown between 1979 and 1992 to its highest level for 50 years.
For a family of two parents and two children, the national average income after housing costs would be pounds 220 per week. The same family living on income support and child benefit would have pounds 153.
But far from wasting the little money they had, the report's author, Elaine Kempson, spoke yesterday of the "incredible resourcefulness and resilience " and "very sophisticated money management" that was shown by those living in poverty.
More than 2,000 people were interviewed around the country for the report, whose publication coincides with the launch of Broke! - a Channel Four season on poverty, beginning today.
The foundation concluded that those on benefits would have had the money they needed to avoid real hardship if the link between earnings and social security benefits had not been broken in the early 1980s. Those who relied on income support - nearly 10 million people - were the worst hit. The inflexibility in the social security system also meant that would-be workers who accepted casual or low-paid jobs for a few hours a week gained little advantage unless they failed to disclose them and committed fraud.
The report paints a bleak picture of those struggling to survive on low incomes. Women, who normally managed family budgets, resorted to complicated strategies that included shopping little and often to avoid stocks of food that might get eaten too quickly, systematic searching for special offers and shopping without partners or children to avoid pressure to spend more.
Anxiety to avoid waste led some mothers to buy convenience foods they knew their children would eat - even if they were not healthy foods.
People living on low incomes tended to have diets which were low in fresh fruit and high in fat. Problems were worse for people who needed special diets as they were often more than they could afford. "I'm on what you call a 'highline' diet with my diabetes," said one woman. "But some weeks it goes out the window ... Sometimes I've really had to cut down with food. As a diabetic I shouldn't. But the things I should eat, I can't."
Parents were adamant they would not compromise on spending for their children, even if it meant going without themselves.
While adults bought themselves second-hand clothes from charity shops or jumble sales, for children they were more likely to compromise, to stop them being teased for wearing "hand-ons". Mothers tried to ensure that clothing lasted for as long as possible by buying a size or two too large.
Debts tended to be for basic household bills - rent, mortgage, gas, electricity and water and council tax - rather than the consumer credit arrears accumulated by better-off debtors. These types of debts carried the harshest sanctions in terms of repossession, disconnection, fines, and even imprisonment. The research shows most people were ashamed of being in debt, and for those whose homes were repossessed, the sense of public humiliation is particularly strong.
"Life on a low income, as experienced by a large and growing minority of the population is a stressful, debilitating and demeaning experience," said Ms Kempson, a senior fellow at the Policy Studies Institute. "While some people manage their budgets more successfully than others, the inability of those on the lowest incomes to make ends meet can seldom be attributed to fecklessness. "Most of those in debt feel shamed and stigmatised, despite knowing they can't pay rather than won't pay. They have found to their cost that looking after the pennies on benefit does not necessarily mean the pounds will look after themselves."
The foundation is calling for a commitment to achieve the fullest possible level of employment, policies to tackle low pay and ensuring that tax changes do not increase the burdens on those least able to pay.
"The unco-ordinated policy-making which has forced poorer people to pay the price for changes that have benefited the majority must be addressed," said a spokesman. "It is important that people in that position are allowed to benefit from general rises in prosperity."
Leading article, page 13Reuse content