An additional 900,000 people were living in poverty in 2011/12 including 300,000 more children, government statistics have revealed.

Figures from the Department for Work and Pensions show the number of working age adults living in absolute low income households – those with incomes below 60% of the 2010/11 median - grew by half a million in 2011/12, while absolute child poverty increased by 2%.

Absolute child poverty reached 3.8m after housing costs were calculated, accounting for 29% of youngsters. Numbers of pensioners living in households with absolute low income also grew by 100,000.

Charities said the data revealed working families were being pushed into poverty, and warned further cuts to public services and social security meant the number of people living in poverty was likely to increase.

Under the preferred government measurement, the percentage of children and adults in relative low income – having household income below 60% of the contemporary median – remained almost unchanged at 16% between 2010/11 and 2011/12.

Average income was also shown to have decreased by 3% in 2011/12 in real terms, a similar reduction to that seen in the previous year. Figures to be released later today by the Institute for Fiscal Studies show median income for people in their 20s has not increased between 2001/2 and 2007/8, while the incomes of pensioners has seen rises.

Work and pensions secretary Ian Duncan Smith said: ‘While this government is committed to eradicating child poverty, we want to take a new approach by finding the source of the problem and tackling that. We have successfully protected the poorest from falling behind and seen a reduction of 100,000 children in workless poor families. Our welfare reform programme will further increase work incentives.'

Responding to the figures, Child Poverty Action Group's Alison Garnham said: ‘The truth is that for a growing number of families work isn't working. The promise that work would be a route out of poverty has not been kept as wages stagnate and spending cuts have hurt low income working families.'

Oxfam's Katherine Trebeck said: ‘It is unacceptable that in the seventh richest country on the planet, we've seen the number of people living in poverty increase by nearly a million. With cuts to public services and social security in the pipeline, the number of people living on absolute low incomes will only increase over the years and people will find it even harder to overcome their situation.'

Earlier this week, trade unions warned that further cuts to council funding would exacerbate levels of child poverty in the UK's most deprived areas.