The number of people in relative poverty has fallen by 100,000 over the past year to 9.7 million, according to new official figures.
The Government said the annual poverty statistics also showed that in-work poverty fell by 200,000.
The percentage of people in relative poverty is at the lowest level since the 1980s, said ministers.
Median incomes remained broadly unchanged between 2011/12 and 2012/13, up £2 to £440 a week for a couple with no children.
Work and Pensions Secretary Iain Duncan Smith said: "Despite the deepest debt-fuelled recession in living memory when £112 billion was wiped off the economy, we have protected the most vulnerable families from falling behind with 300,000 fewer children in poverty since 2010.
"Today's figures underline the need to stick to the Government's long-term economic plan of restoring a strong economy that creates jobs, and a tax and welfare system that helps people into work and makes work pay."
Relative poverty is measured as 60% of median income.
The Gingerbread campaign group said the statistics showed a steep rise in child poverty for single parent households where the parent works full-time, climbing from 17% of households where the single parent works full-time in poverty in 2011-12 to 22% in 2012-13.
Almost one in four children whose single mother or father works full-time is now growing up poor, while nearly one in three with a single parent working part-time is in poverty, said the group.
Gingerbread chief executive Fiona Weir said: "It is deeply concerning that while the economy is on the up, hundreds of thousands of families remain trapped into poverty. For far too many single parent families, work offers no real promise of escape from hardship, as today's figures show a rise in working poverty where a single mum or dad is working full-time."
TUC general secretary Frances O'Grady said: "Today's figures clearly show why living standards are falling. While wages have stagnated, and benefits and tax credits have been cut, prices have been rising - especially the cost of housing.
"Since the last election a million more adults and half a million more children fell into absolute poverty when housing costs are taken into account. Without a major affordable home building programme and action to secure fair wages, this type of poverty will continue to grow."
Barnardo's said the figures found no change in the number of children living in relative poverty, while the number of children in severe poverty has increased.
Chief executive Javed Khan said: "The news that 100,000 more children are now living in severe poverty in the UK is shocking.
"The Government is making no progress in tackling child poverty. Over the past few years, the poorest families have been left financially stranded by measures which have cut lifeline benefits, with few alternatives that make work pay, partly due to delays with Universal Credit.
"To prevent more children growing up in poverty, the Government must act urgently to genuinely boost the poorest families' incomes.
"Measures should include restoring the link between benefits and inflation, and ensuring that low paid families can keep more of their earnings when Universal Credit is introduced."
Mark Goldring, Oxfam chief executive, said: "Today's figures reveal that the economic recovery is not making enough of a difference to the poorest, many of whom are facing a daily struggle to put food on the dinner table. Politicians of all parties need bolder, long-term policies that can help people move up the rungs and out of poverty.
"Whilst doing our work, we have seen the unacceptable levels of poverty that exist in one of the richest countries in the world and call for politicians of all stripes to urgently address the issues that are keeping people in poverty."
Julia Unwin, chief executive of the Joseph Rowntree Foundation, said: "Today's figures show that we are not making sufficient progress into tackling high levels of poverty, despite rising employment and economic recovery. Research conducted for JRF by the Institute for Fiscal Studies forecasts that 2.5 million more people could be in poverty by 2020 unless a joined-up coordinated approach is taken.
"The return to lasting economic growth and long-term prosperity will be hampered if we fail to address the levels of poverty in the UK. We know that individual policies which tinker around the edges do not reduce poverty.
"We need a comprehensive strategy that gets to grips with low pay, the high cost of essentials and reform to the tax and benefits system to ensure work is a route out of poverty."
Prime Minister David Cameron's official spokesman said: "Child poverty remains at its lowest level since the 1980s. It has fallen by 300,000 since 2009/10.
"Does the Government want to continue to do more in this area? Of course.
"Absolutely at the heart of improving prosperity across the country and for all is the importance of sticking to the long-term economic plan, because at the heart of dealing with poverty is work."
The spokesman added: "In terms of wider poverty, the target established under the previous government is one of relative income, and that stands at its lowest level since 1982."
Rachel Reeves, shadow work and pensions secretary, said: "These figures show the Government's child poverty strategy is failing abysmally with no progress for the millions of children still living in poverty. They also include extremely worrying signs that rising housing costs are set to push more children into poverty and that severe poverty is on the rise.
"The last Labour Government lifted over one million children out of poverty, helped thousands of families into work, built children's centres and introduced child and working tax credit to make work pay. But under David Cameron child poverty is forecast to rise, not fall."