Analysis by Action for Children of Department for Work and Pensions data for 2014/15 to 2016/17 on family income, including material deprivation, which measures access to basic items, found there are one million children under the age of 10 living in families with a household income below 70 per cent of the average income.
The charity also found that there are 300,000 children aged 10 and younger who live in a household with severe low income and material deprivation. These households are defined as having both a low material deprivation score and a household income of less than half of the average income.
In addition, the charity has carried out a survey of 2,000 adults who celebrate Christmas. The survey found that half of parents are cutting back on spending on presents, Christmas dinner and decorations during the festive period. A quarter (25 per cent) said they are getting into debt to pay for Christmas.
Norfolk-based Paul and Donna Maund, who have four children under the age of 10 are among parents that spoke to the charity.
"We're having to use a Christmas tree given to us last year by friends, as well as donated ceiling decorations. It won't be long before we'll have to start using foodbanks as I've noticed prices going up and up," said Donna.
"By finding the bargains at discount supermarkets I've worked hard to get my weekly food bill for the whole family down to £45 but the only way we can afford Christmas dinner and all the treats for the kids this year is by going to my parents. I've been trying to save and find one present a week over the past few months, but it's been hard."
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The charity is calling on the government to end a freeze on children's benefits to ensure that more families do not fall into poverty.
It says it has already seen a 30 per cent rise in the number of families seeking financial advice from the charity over the last three years. Action for Children is also preparing to run foodbanks over Christmas to support families.
Action for Children chief executive Julie Bentley said: "Our youngest children should be waking up in a warm bed after a visit from Santa on Christmas morning, but the shocking truth is that in 2018 many will be cold and hungry in the fifth richest country of the world.
"No parent should be forced to face the appalling choice between ‘eating or heating' at Christmas but this is the reality for far too many in the UK today. While the government tells us austerity is at an end, every day at Action for Children, we see first-hand the impossible choices that families living in practically Dickensian levels of poverty have to make."
Meanwhile, the Joseph Rowntree Foundation's annual poverty report released this week shows there are now 4.1 million children living in poverty, up 500,000 in the past five years.
In 2017, a total of 365,000 children were destitute, which is defined as not having access to adequate food, able to stay warm and dry and keep clean.
Other findings are that nearly half (49 per cent) of children in lone-parent families live in poverty, compared with a quarter (25 per cent) of those living with a couple.
A separate report by children's charity Spurgeon's has found that 12 per cent of all British parents with children aged 18 and under feel "out of their depth".
A survey found parents' main concerns about their children's lives with 43 per cent worried about their children getting into a physically or mentally abusive relationship; over a third (35 per cent) were worried about them self-harming. A further 30 per cent of parents of children aged 18 and under were worried about their children getting involved in gang activity.
A Department for Work and Pensions spokeswoman said: "We want every child to have the very best chances in life. There are now one million fewer people living in absolute poverty since 2010, including 300,000 children.
"With this government's changes there are fewer children in workless households than ever before, boosting their prospects in life. Household incomes have never been higher, income inequality has fallen and taxes are down for families."