Four million children were living in poverty in 2017-18, up by 400,000 in the past five years, Sky News reported.
Despite rising levels of employment, the Joseph Rowntree Foundation's (JRF) State of the Nation report says in-work poverty has also gone up because often people's pay, hours, or both are not enough.
Fourteen million people across the UK currently live in poverty — 56 percent of them are in a working family, compared to 39 percent two decades ago.
Two million pensioners are also living in poverty, up by 300,000 over the past five years.
The report says there are regional differences in poverty rates, with the worst figures in London, the North, the Midlands and Wales.
The lowest rates are in the South (excluding London), Scotland and Northern Ireland.
Two major drivers of differences in poverty rates are the availability of good-quality jobs and housing costs.
Becca Lyon, head of UK poverty campaigns at Save the Children, hit out at the controversial Universal Credit scheme — a payment to help with living costs in the UK — saying the social security system must be reformed and childcare support improved.
The Trussell Trust, which runs food banks across the UK, also criticized Universal Credit.
Chief executive Emma Revie said, "The findings from JRF's report today could not be clearer — for too many people it's becoming harder and harder to keep their heads above water.
"At food banks, we're seeing issues with our benefits system, like the five-week wait for Universal Credit and payments not covering the cost of living, pushing more people than ever before to food banks."