"The decision not to target support at those hardest hit by rising prices will leave low-and-middle income households painfully exposed. 1.3 million people, including 500,000 children, are set to fall below the poverty line this year," Resolution Foundation chief executive Torsten Bell said in a statement.
On Wednesday, Sunak announced a 5 pence per liter cut in fuel duty and an increase in the threshold at which people pay national insurance contributions, benefiting around 30 million workers with a tax cut worth more than £330 ($435).
However, the Resolution Foundation said the measures do not meet the scale of the cost-of-living squeeze.
The big picture is that Rishi Sunak has prioritized rebuilding his tax-cutting credentials over supporting those who will be hardest hit from the surging cost of living, Bell said.
The UK think tank said that despite the tax cuts announced on Wednesday, a typical working-age household will see their real income fall 4% next year — a loss of £1,100 ($1,425).