The UK risks becoming a "permanently divided" society unless "radical new approaches" are taken by the next government, a report suggests.
The
Social Mobility and Child Poverty Commission also claims the target to reduce child poverty by half by 2020 will not be met.
Chairman Alan Milburn said the three largest Westminster parties were being "less than frank" on the issue.
He said housing costs and youth unemployment needed to be tackled.
Mr Milburn, a former Labour minister, said the current government had "discredited existing child poverty targets and failed to put in place new ones", creating an "unholy mess".
The existing targets were put in place in 2010 by the last Labour government. Currently, a child is classed as being in relative poverty if his or her family income is less than 60% of median earnings.
According to the commission's report "absolute child poverty increased by 300,000 between 2010-11 and 2012-13" and "independent experts expect child poverty to increase significantly over the next few years". It also says that "working poverty after housing costs is rising".