The Child Poverty Action Group (CPAG) said that the cost of raising a child to the age of 18 has gone up by 4% over the last year.
But the value of benefits for families and children only rose by 1%, and child benefit did not rise at all, tightening the squeeze on living standards.
At the same time minimum wages rose 1.8% and average earnings by 1.5%, making it harder for parents to provide a decent standard of living for their families.
Alison Garnham, chief executive of CPAG, said: "This research paints a stark picture of families being squeezed by rising prices and stagnant wages, yet receiving ever-diminishing support from the Government over the course of the last year."
The report, co-funded by the Joseph Rowntree Foundation, found it cost about £160 a week to raise a child, including child care costs and housing.
The basic cost for a couple to raise a child over 18 years was £81,772, or £148,105.
A Government spokesman said: "We are taking action to help families with the cost of living by cutting income tax for 25 million people, which will save a typical taxpayer over £700, taking 2.7 million out of income tax altogether and freezing council tax for five years, saving a typical household £600."