A couple with two children will be £1,250 a year worse off by 2015 as families "shoulder the burden of austerity", an Institute for Fiscal Studies report has found.
The study, commissioned by the Family and Parenting Institute, said the shrunken income reflects benefit cuts for those of a working age and the greater reliance on benefits by people with children than those without.
Lone unemployed parents are set to be particularly badly hit, losing £2,000 of their annual income, representing a 12% drop, the study said.
The report highlighted a "very real concern" as single parents face the challenge of finding a flexible job in a tough labour market as well as meeting childcare costs.
The report, titled The Impact of Austerity Measures on Households with Children, found that incomes among homes with children are set to fall in real terms by 4.2% between 2010-11 and 2015-16.
The annual reduction in income of £1,250 for a couple with two children is "significantly" steeper than the 0.9% drop felt across all households and the fall in income of £215 a year for couples with no children.
The report warned that 500,000 more children will fall into absolute poverty between 2010-2011 and 2015-16, with most coming from households where the youngest child is aged under five.
Homes with children aged under five face a 4.9% drop in income by 2015-16, the report found, saying these tended to be households which relied more strongly on benefits than those without young children, who would see incomes grow more strongly when real earnings started to rise.
Larger families will also be strongly affected, largely driven by the imposition of the cap on the total amount of benefit families can receive to be introduced in 2013-14, the report found.
Families with three children are predicted to see their incomes fall by 6.8% by 2015-16, compared with those with only one child, who are set to see a 3.3% fall.
Dr Katherine Rake, chief executive of the Family and Parenting Institute, said: "Having children has always been expensive. But now many families with children face an extra penalty of more than £1,000."
The report said that the introduction of Universal Credit will "soften the blow" for some families.
But as it will only be brought in from October 2013 for new claimants and from April 2014 for existing claimants, the report said the Government should consider whether the right financial safeguards are in place to protect vulnerable groups in the meantime.
Before taking Universal Credit into account, the poorest families will be 10% worse off in 2014-15, but even after its introduction they will be just over 6% worse off, the study said.
The report also argued that Universal Credit could create some unintended consequences, by favouring single-earner couples and weakening incentives for both members of a couple to take a job.
Dr Rake continued: "It is particularly surprising to see that some of the most vulnerable groups - such as families with new babies and lone parents out of work - are bearing the brunt of the tax and benefit reforms.
"Many families will be left struggling to understand why they have been singled out in this way and how this sits alongside the Government's ambition for the UK to become a family-friendly nation."
The report also found that people who own their homes outright will be 1.4% better off by 2015, with interest rates forecast to rise from 2013 onwards, helping their incomes grow, though it acknowledged that "those who own their home outright are a relatively small group among those with children".