Thirteen million families will lose an average of £260 each year because of the change to working-age benefits, the Institute for Fiscal Studies (IFS) has said.
Reacting to the first all-Conservative Budget in 19 years, the IFS said it was "regressive" and had taken "much more" from the poor than the rich.
George Osborne earlier defended his Budget, saying it represented a "new contract" for Britain.
A new compulsory National Living Wage for working people aged 25 and over of £7.20 an hour will be introduced from April 2016.
George Osborne said this would be increased to £9 an hour by 2020.
Explainer: What is the National Minimum Wage?
ITV News Deputy Political Editor Chris Ship tweeted it would have been due to rise above £8 in the next five in any case so only really equates to an extra £1 an hour.
And Labour leadership hopeful Liz Kendall tweeted the actual living wage was higher at £7.85.
Since the Budget, a cascade of analysis has crashed across our screens and squirted ink over our newspapers - much of it missing the point.
This afternoon, the Institute for Fiscal Studies presented a damning analysis of George Osborne's Budget. Here we explain the key points.
The Chancellor's "Living Wage" is considerably lower than the rate the Living Wage Foundation campaigns for but this is still a bold move.