George Osborne has resisted pressure to change course over his austerity plans as he warned there were "no easy answers" to the UK's economic woes.
The Chancellor insisted that failing to tackle the country's debt and deficit problems could leave the UK on the brink of a crisis like that in Cyprus.
He said Wednesday's Budget would contain measures to "help those who aspire to work hard and get on" but would also set out the scale of further curbs on public spending from 2015.
Mr Osborne indicated there would be help with the cost of childcare and also announced plans to accelerate the introduction of a cap on the amount people will have to pay for social care, bringing it in at £72,000 in 2016.
The £144-a-week single state pension will also be introduced a year ahead of schedule in 2016, Mr Osborne said.
The Chancellor has also backed plans put forward in Lord Heseltine's growth report to give local communities and businesses a greater say on how money is spent in their areas. But on his central aim of restoring the nation's finances, Mr Osborne said there was "no miracle cure" and "painstaking work" was required.
"That is an example in Cyprus of what happens if you don't show the world that you can pay your way. I mean that is why in Britain we've got to retain the confidence of world markets," he said.
In a bleak assessment of the challenge facing the country, Mr Osborne said: "There is no easy answer to Britain's problems, there is no miracle cure because if there was a miracle cure it would have been deployed. It's just a lot of hard work of dealing with Britain's debts, helping businesses create jobs, helping families who want to work hard and get on."
He added: "The only way through for this country is to confront those problems head on and energise the people who are actually going to get this economy moving, the people with aspiration."