Government child poverty targets are underestimating by more than 2 million the number of children who need support, a leading think tank has claimed.

A Policy Exchange study entitled ‘Outcomes not just incomes' argues welfare ministers should scrap current child poverty measures with a new target that takes into account both household income and social factors.

Because the present system favours households without jobs over working households, other important issues which shape a child's life - such as whether they live in temporary accommodation, are in a good school, have been in the care system are ignored.

Consequently nearly one in five children, some 2.3 million who suffer deprivation are not included in the government's headline measure of relative income poverty, the authors state.

Matthew Oakley, head of economics and social policy at Policy Exchange said:  ‘Simply assessing whether a child is in poverty on the basis of household income fails to take into consideration a number of serious issues.

‘It leads us to think we are improving outcomes for children when in fact they can still be living severely deprived lives,' Mr Oakley added

‘A new measure, focused on income as well as factors such as the quality of housing and level of education, would likely increase the number of children in poverty,' he said.