None of the four main UK parties are proposing a tax cut package that would predominantly benefit low earners, the Resolution Foundation thinktank said on Monday.

A report analysing the impact of the main tax cuts being proposed by the Conservatives, Labour, the Liberal Democrats and the UK Independence party (Ukip) said they would not benefit nearly 5m low-paid employees who do not pay income tax.

Although it found the Labour and Lib Dem proposals were less regressive than the Conservative and Ukip ones, it said that the poorest 50% of households would only get a quarter of the overall benefits even under the fairer plans. The foundation said a more progressive approach would be to raise the national insurance threshold and to lift the work allowance within universal credit. Even though the government is running a deficit of nearly £100bn, all the main parties will be proposing tax cuts in their election manifestoes.

The Conservaties and the Lib Dems both want to raise the basic rate income tax threshold to £12,500. The Conservatives also want to lift the higher rate threshold to £50,000. Labour wants to introduce a 10p tax band. And Ukip wants to raise the basic rate threshold to £13,500, and to introduce a new 35p tax band for those earning between £47,000 and £61,000.

In its report, Missing the target – tax cuts and low to middle income Britain, the Resolution Foundation said all four parties were ignoring the needs of those earning the least.

“Of every pound spent on their proposals, around a quarter goes to households in the bottom half of the income distribution under the Labour and Lib Dem approaches. Under Ukip and the Conservatives, around a fifth goes to the bottom half,” the foundation said.

It said the richest 20% of households would benefit the most from the parties’ plans. Under the Labour and Lib Dem proposals they would gain around a third of the money being spent, and under the Ukip and Conservative plans they would gain nearly half of the money being distributed.

Gavin Kelly, the foundation’s chief executive, said: “At a time of prolonged austerity, it is striking that all the main parties are promoting tax cuts. There are big differences between them: the costs vary greatly and some are funded while others aren’t. But they all share one thing in common – the clear majority of the gains flow to better off households.”

Instead, Kelly said, the next government should “at the very least” increase the work allowance within universal credit that determines how much people can earn before they start losing benefit. He said this was necessary because, under the current arrangements, many low earners would find that for every extra £1 they received from a tax cut, they would lose 65p in universal credit.

Kelly also said it would be fairer to prioritise raising the national insurance threshold, because this would benefit the 1.2m people who earn enough to pay national insurance but not enough to pay income tax (for which the threshold is higher).