The charity, which carried out two surveys, one of parents and one of children, found that more than half of the 5,000 parents who responded have cut back on food and 26 per cent have skipped meals in the past year.
One in five parents in poverty said their children have to go without new shoes when they need them or a warm winter coat.
The report splits parents into income groups. Those with annual incomes of up to £16,999 are categorised as living in poverty while those with an annual income of £17,000-£29,999 are classed as being on modest incomes. Parents earning incomes of £30,000 and above are classed as better-off/more affluent households.
Children also reported on missing out on things that many other children take for granted.
Of the 1,504 children surveyed, almost one in three in poverty misses out on having friends round for tea and one in ten misses out on celebrating their birthday. In some instances, children from modest-income families are also missing out.
Almost three in ten families said they have nothing left to cut back on.
Findings from the Save the Children report, ‘Child Poverty in 2012, it shouldn’t happen here’, also indicate that low-income parents are twice as likely to split up, challenging the idea that separation causes poverty.
Around 23 per cent of parents in poverty said they were more likely to snap at their children, and nearly a quarter claimed they argue more with their partner than they used to because of money worries.
Save the Children is hoping to use the findings to persuade the Government to make work pay as Department for Work and Pensions 2012 figures show that 61 per cent of children in poverty have working parents, compared to 45 per cent in the mid 1990s.
The charity says it is more important than ever that action is taken to tackle child poverty if the Government wants to meet its goal of eradicating child poverty by 2020.
Save the Children wants the Government to encourage employers to introduce a living wage, strengthen the Universal Credit by allowing parents to keep more of their earnings before benefits are withdrawn, and provide extra support towards childcare costs so at least 80 per cent of low-income parents’ childcare costs are covered.
It also calls for the burden to be eased on low-income families by protecting them from increases in living costs and further public spending cuts.
In light of the survey's findings, the charity is launching, for the first time in its history, a UK appeal to help this country’s poorest children, with an initial fundraising target of £500,000.
Justin Forsyth, Save the Children’s chief executive, said, ‘No child should see their parent going hungry or start the new term without a warm coat and with holes in their shoes. Poverty is tearing families apart, with parents buckling under the pressure of mounting bills and children seeing their parents argue more about money. That’s why for the first time in our history we are launching a UK appeal. We need to help poor families survive the recession.
‘Given that most children living in poverty have at least one parent in work, it is appalling that those parents can’t earn enough to give themselves and their kids a decent life. All working parents should be able to earn enough to meet the basic needs of their children.’