The Institute for Fiscal Studies forecasts two years "dominated by a large decline" in incomes, pushing 600,000 more children into poverty,
By 2013 there will be 3.1 million children in poverty in the UK, according to the IFS projections.
The IFS says that in 2010, 2.5 million children and 2.1 million working-age parents were living in "absolute" poverty.
But it warns that in the next two years poverty levels will get worse.
By 2013, the IFS predicts the number of children in absolute poverty will rise by 600,000, peaking at 3.1 million, along with 2.5 million working-age parents and four million working-age adults without children.
The report, funded by the Joseph Rowntree Foundation, also confirms that targets set in 2010 to cut absolute child poverty by 2020 to 5% are likely to be missed by a wide margin - with the IFS forecasting it will be 23%.
If these predictions prove to be correct, nearly one out of four British children will be living in poverty by 2020.
