Low-income households spend an average of £2.10 a person a day on groceries, having cut their daily food budget drastically since the summer, according to the latest instalment of a survey on the impact of welfare reform.

The detailed survey of more than 87 families found that a third said they now spent less than £20 a week on food, partly to cope with spiralling gas and electricity bills, while more than half said they had no money left once bills were paid.

A combination of shrinking incomes and rising living costs, coupled with high personal debts meant the "reality of everyday life has got tougher" for low-income families since April when a series of welfare changes, such as the bedroom tax, were introduced, the report said.

There were no signs yet that welfare reform had helped jobless tenants to find work or an increase in working hours, despite a rise in the percentage of participants searching for work.

The Real Life Reform survey examined the finances and everyday habits of tenants in eight housing associations in north-west England and Yorkshire in October. One in five tenants were in work. The average household weekly income for social housing tenants in the region is £265 a week.

Food spending had dipped from £3.27 a person a day in July to £2.10 in October. The survey found neighbours were coping by sharing the cost of meals, including one group of women who clubbed together to cook a Sunday roast to ensure their children ate "decent food". Others were using food banks, eating with relatives, or missing out on some meals altogether.

One tenant quoted in the report said: "We don't have breakfast and dinner now. We have one meal a day. We've been doing that for about two months and we've got used to it."

Lisa Pickard, chief executive of Leeds and Yorkshire Housing Association said that despite incredible resilience, some families were struggling to survive: "With the pressure of worsening weather, rising energy costs and Christmas, there is no question that people will face difficult choices – between eating or heating their homes and getting into more debt."

Frank Field, chair of the all-party parliamentary group on hunger and food poverty, told the Guardian the hardship demonstrated in the report reflected already established trends that had been made worse by welfare reform.

"It begins to explain why people have fallen back on food banks as one way of making an inadequate budget stretch further."

After rent, bedroom tax, transport costs, clothing and council tax, it found participating families spent an average of £33 a week on food. Many participants said they now bought cheaper, lower quality food, and were eating less fruit, vegetables, meat and fish.

Cuts in food spending were in part a response to rising weekly energy bills, up 16% since the first survey in July, and amounting to an average of £30 a week. Fuel bills were expected to increase in the winter, though the report noted that in October the average family had just £4.79 left after bills were paid (down from £12.50 in July), making it unclear where the cash for extra heating would come from.

Many households said they could not afford to heat their homes already, however, and a quarter had reduced fuel spending since July.

Survey participant Dawn Lennon, 52, who lives with her disabled 28-year-old daughter Kelly in a three-bedroom housing association home in Runcorn, said the welfare changes, coupled with cost of living increases had left her with barely any money left after bills were paid.

She has to keep the heating on 24 hours a day because of her daughter's condition, Smith-Lemli-Opitz syndrome. Despite the third bedroom being used as a sensory room for Kelly, she must meet an £11 housing benefit shortfall each week as a result of the bedroom tax, and has been refused discretionary housing payment help.

As a result she has cut down on the volume and quality of food she buys. "I just get the cheapest stuff that I can afford. I'm not eating healthily. I'm just counting the pennies."

She said she believed they were being unfairly penalised by welfare reform, and she invited ministers to come and see how they lived.

"At the moment there is no light at the end of the tunnel. Things are just getting harder."

The report showed that participants' problems were exacerbated by high levels of personal debt. Nearly three-quarters of households owed money, with an average debt of £2,273. Although this average figure was down marginally since July, the number of tenants with debts of up to £1,000 had risen by 23%. One in every three tenants now had a council tax debt, following the abolition of council tax benefit in April.

More than a quarter of tenants owed money on household bills, compared with 17% in debt to the bank and 10% to credit card companies. One in 10 owed money to payday lenders or loan sharks. Despite repaying up to £40 a week, tenants were finding it hard to chip away at underlying debt levels, suggesting many were trapped in a "perpetual cycle of borrowing".

A spokesperson for the Department for Work and Pensions said: "The government has taken action to help families with the cost of living, including increasing the tax-free personal allowance to £10,000 which will save a typical taxpayer over £700, freezing council tax for five years and freezing fuel duty.

"The benefits system supports millions of people who are on low incomes or unemployed and there is no robust evidence that welfare reforms are linked to increased use of food banks.

"In fact, our welfare reforms will improve the lives of some of the poorest families in our communities with the universal credit making 3 million households better off – the majority of these from the bottom two-fifths of the income scale."