The number of workers living in poverty has reached a record high as the UK's housing crisis fuels growing insecurity, a new study reveals.
Research by the Joseph Rowntree Foundation (JRF) showed that 3.8 million workers, or one in eight, are in poverty after an increase since the economy started recovering six years ago.
A total of 7.4 million people, including 2.6 million children, are living in poverty despite being in working households, said the report.
The study said there was growing insecurity underneath the positive economic picture, including rising levels of employment.
The problem is being driven by the housing crisis, especially in the private rented sector, where the numbers living in poverty have doubled to 4.5 million in a decade, said JRF.
More than half of people in poverty in England live in London and southern England, and the capital has the highest poverty rate at 27% - 6% above the UK average, the study found.
Helen Barnard, head of analysis at the JRF, said: "The UK economy is not working for low-income families. The economy has been growing since 2010 but during this time high rents, low wages and cuts to working-age benefits mean that many families, including working households, have actually seen their risk of poverty grow.
"As it negotiates Brexit, it is vital that the Government does not allow its focus to slip from the domestic concerns that make a huge difference to people who are just about managing. This report shows that people on low-incomes cannot rely on economic growth and rising employment alone to improve their financial prospects.
"Families who are just about managing urgently need action to drive up real-term wages, provide more genuinely affordable homes and fill the gap caused by cuts to Universal Credit, which will cost a working family of four almost £1,000 per year."
JRF urged the Government to reduce poverty by taking measures including reversing cuts to the Work Allowance, end the freeze on working-age benefits and build more affordable housing.
JRF said poverty was measured as income, adjusted for household size, below 60% of the median after housing costs have been deducted.
TUC general secretary Frances O'Grady said: "A fair day's work should mean a fair day's pay. But wages are simply too low, and millions are struggling to afford the basics, even when they're working hard.
"After the financial crisis, UK wages fell further than in any other developed country except Greece. It's time for employers to give their staff fair pay and decent hours, while the Government should lift the public sector pay cap and invest in our economy."
Alison Farnham, chief executive of the Child Poverty Action Group, said: "As today's report makes clear, for all the talk about helping just managing families, if you scratch below the surface, we have the highest ever proportion of poor people in households with jobs.
"We have higher employment and falling worklessness, but we also have 2.6 million poor children with a working mum or dad."
A Government spokesman said: "Since 2010, the number of people living in poverty has fallen by 300,000 but we know there's more to do.
"We're increasing the National Living Wage and taking millions of people out of income tax, to make sure it always pays to be in work."
Campbell Robb, Shelter's chief executive, said: "Sky-high rents are pushing more and more people to the brink as they struggle to find somewhere to call home. This Christmas, over 120,000 children in Britain will wake up homeless.
"Clearly something has gone very wrong when so many families, despite working hard, are struggling to keep their heads above water."
Debbie Abrahams, shadow secretary of state for work and pensions, said: "The Joseph Rowntree Foundation has shown the true impact of six wasted years of Tory austerity, with 7.4 million people in poverty in working households.
"This Government has no plan to tackle stagnant wages and rising insecurity, choosing instead to make the poorest pay for their economic mismanagement."
Justin Watson, Oxfam's head of UK programmes, said: "The economy clearly isn't working for the 3.8 million employees in the UK who are living in poverty and the women who are now the single largest group experiencing in-work poverty.
"The Government should ensure businesses are creating decent jobs that pay a living wage, respecting workers' rights and not using exploitative zero-hours contracts."