Britain’s “medieval” levels of health inequality are having a “devastating” effect on the NHS, experts have warned, with the health service estimated to be spending as much as £50bn a year on the effects of deprivation.

Rising rates of child poverty have led to a growing burden on hospitals, with the knock-on cost to the NHS comparable to the annual defence budget.

One senior NHS figure said they were seeing “medieval” levels of untreated illness in some of Britain’s poorest communities, including people attending A&E “with cancerous lumps bursting through their skin”.

Another said hospitals were witnessing a “chilling” trend of vulnerable people, young and old, deliberately self-harming to secure an overnight stay. Concern has also been raised about rising rates of “Dickensian” illnesses, including scabies, rickets and scarlet fever.

The disclosures are revealed as part of a months-long Guardian investigation into the effects of deepening poverty on a “broken” NHS.

Rachel Reeves, the chancellor, last week unveiled a £29bn real-terms increase in day-to-day NHS spending – up to £226bn by 2029 – rising to almost half of all non-capital public spending by the government in that time.

Wes Streeting, the health secretary, last week pledged to direct billions of pounds of extra NHS funding into poor areas by banning hospitals from overspending and overhauling the formula used to decide the levels of funding GP surgeries receive.

This Thursday he will unveil the government’s 10 year health plan, which will include radical plans to transform the NHS from a service primarily focused on treating illness to preventing it.

However, NHS trust leaders are warning that cuts to other key areas – and long-delayed plans to reform social care and tackle child poverty – will leave hospitals and GPs having to “deal with the fallout”.

There is also unease about how Wes Streeting’s ambition to shift the health service from treatment to prevention, to be unveiled next month as part of the plan, square with the deep cuts to regional independent care boards, which are under pressure to axe as many as 12,500 jobs by the end of this year.

Saffron Cordery, the deputy chief executive of NHS Providers, which represents NHS trusts, called for a cross-governmental approach to tackle the impact of poverty on health.

“Prevention is better than cure but after many years of underinvestment and cuts there is a lot more to do to achieve the government’s ambition of a clearer focus on preventing ill health,” she said.

“Made worse by the cost of living crisis, poverty has played a part in driving record demand for stretched mental health services, particularly among children and young people.”

A comprehensive report published by the Joseph Rowntree Foundation (JRF) in 2016 estimated that £29bn of NHS spending was associated with poverty.

One of the report’s authors, Prof Donald Hirsch of Loughborough University said that although the exact cost today cannot be known without repeating the study, it was likely to be much higher.

“We spend a lot more on the NHS now than in 2014, and if the fraction attributable to poverty were the same, the cost would have risen to nearly £50bn,” he said.

“In fact it could be much higher, since far more people are experiencing severe hardship, including hunger and destitution, which could have strengthened the links between poverty and ill health, and hence higher health spending.”

Studies suggest about a quarter of all spending in acute hospital care and primary care can be attributed to greater use of these services by people in poverty. At £50bn a year, spending on health deprivation would be similar to the defence budget and account for about £1 in every £10 spent by the government on all public services.

A report by the Royal College of Physicians, published last week, estimated that air pollution – which disproportionately affects deprived communities – was contributing to about 30,000 deaths a year and about £500m a week in NHS and economic costs.

Katie Schmuecker, the principal policy adviser at the JRF, said: “Without an urgent commitment to tackling deep poverty, no plan to improve public services can succeed and the NHS and economy will continue to suffer as a result.

“Hardship is causing avoidable harm to people’s health as well as holding back our economy, and failing to act on this costs us all dear.”

Schmuecker said widespread deprivation was having a “devastating” effect on the NHS and the economy. Studies have shown that those living in poverty are getting sicker and access healthcare later, contributing to A&E admissions that are nearly twice as high in the poorest groups and emergency admissions that are 68% higher.

Dr Andy Knox, the acting medical director of Lancashire and South Cumbria integrated care board, which spans some of the poorest areas of Britain, said only “full systemic change” in the approach to public health would curb widening inequality.

“There is an urgency to the situation we find ourselves in,” he said. “We have not created a healthy society, and particularly for our most disadvantaged communities, this is now having a profoundly negative effect and placing huge pressure on our health and care system.”

A report by the Health Foundation last year found that health inequalities are expected to continue over the next 20 years, with people in the poorest areas likely to be diagnosed with major illness a decade earlier than people in the wealthiest. The life expectancy gap between these areas has widened across Britain since 2013, according to the Office for National Statistics.

Hugh Alderwick, of the Health Foundation, said the government’s mission to tackle poverty and its impact on health “appears to be missing in action”. He said pressure on the NHS would continue to grow without “meaningful policy action to improve people’s social and economic conditions”.

A government spokesperson said ministers were “determined to change people’s lives for the better, helping them out of poverty and protecting those who need it most”.

The spokesperson added: “As part of our plan for change we announced a new £1bn package to reform crisis support, as well as the expansion to free breakfast clubs, increasing the national minimum wage and supporting 700,000 of the poorest families by introducing a fair repayment rate on universal credit deductions.

“We are also reforming the NHS so it is there for everyone, regardless of who they are or where they live, and have hit the ground running, delivering an extra 3.6m appointments since July to cut waiting lists.”