The Daycare Trust and the TUC said it must reform the tax credit system and subsidise more childcare places after finding that larger families were hit disproportionately by childcare costs.
Although only a third of all youngsters are in families of three or more children, they account for half of all children in poverty. Research by Bristol University professor Hilary Land argued the link between family size and poverty is strong.
Separate research released by the trust showed childcare costs have risen by more than inflation for the third year running.
Daycare Trust director Stephen Burke said the childcare tax credit needed to improve by acknowledging that parents with two or more children faced increased costs.
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