TOP economists revealed yesterday that two-thirds of Britain’s poverty-stricken children now live in working families — despite David Cameron’s pledge to give working people “a life.”

A joint report by the Institute of Fiscal Studies (IFS) and the Joseph Rowtree Foundation (JRF) also revealed “material deprivation” is now much higher for the most vulnerable in society, including single parents and disabled people.

At yesterday’s PMQs Mr Cameron argued that the Conservatives “want to get people into work, we want to give people a chance, we want to give people a life, that’s what this Budget was all about.”

But the groups’ figures tell a different story, as average household incomes are now back to levels from almost a decade ago. 

Inequality between working families has only fallen since 2007-8 because lower-income households have been supported by in-work benefits.

JFR chief executive Julia Urwin said: “A strong economy and rising employment have masked the growing problem of in-work poverty, as years of below-inflation wage rises have taken their toll on people’s incomes. 

“The upcoming minimum wage rise will help, but many low-income working families will still find themselves worse off due to tax credit changes. 

“Boosting productivity and creating more jobs which offer progression at work is vital to make work a reliable route out of poverty.”

The report adds: “Benefit cuts over this Parliament will put upward pressure on absolute poverty for working-age households — including those in work. 

“The planned rises in the minimum wage will help many of those on the lowest hourly pay, but are smaller in overall magnitude than the benefit cuts and less tightly targeted on low-income households.”

The government’s austerity measures such as cuts to council tax support and the introduction of the bedroom tax were directly linked to an increase in rent arrears.

Labour’s acting shadow DWP secretary Stephen Timms MP said: “David Cameron and George Osborne have overseen a huge increase in the number of children in poverty who live in working families and they’re set to make matters worse with huge tax credit cuts for working people.”

The poverty line is currently set at £136 per week for single individuals and £329 a week for a couple with two children.