It has been carried out by Pro Bono Economics (PBE) and commissioned by KPMG UK in collaboration with the National Literacy Trust. The PBE report found that insufficient literacy skills support early on will generate economic costs of around 830mn over the lifetimes of each year group of five-year-olds, or 7,800 per child on average.

Jonathan Douglas, chief executive of the National Literacy Trust, said, We know that experiencing poverty has a huge effect on a child's early communication, language and literacy skills, and that this will have consequences for their learning, their confidence, their wellbeing, and their ability to thrive for the rest of their lives.

'This research confirms the dire need for immediate intervention'.

In Birmingham, Liverpool and Manchester, more than a quarter of five-year-olds have low levels of literacy, researchers found.

Rachel Hopcroft, head of corporate affairs at KPMG UK, who commissioned the research, said that 'at age five, far too many children are needlessly falling short of the expected standard, before they even been given a proper chance in life'

She added that the research showed this not only impacts our economy, but it curtails access to career opportunities and earnings potential later in life especially among those from deprived backgrounds.