Oxfam is calling for an increase in the minimum wage to protect low income workers from dropping below the poverty line.
The charity says that the rising cost of living, combined with falling wages, and cuts to benefits, is creating the "perfect storm" for low paid workers.
A report published by the charity today shows six out of ten working-age adults living in poverty come from working households.
Oxfam's director of UK poverty Chris Johnes said: "Despite the Government's rhetoric about making work pay, having a job is no longer necessarily enough to lift someone out of poverty.
"More working-age adults in poverty now live in working households than in workless ones.
"The Government is justifying huge cuts to welfare support for people on low incomes by saying this will incentivise work, but there simply aren't enough decent jobs available.
"We need to see income being distributed more fairly if we are to make any impact on reducing levels of poverty."
Seven new food banks were set up in Stoke-on-Trent last month because of an increase in demand.
Some are open during evenings and weekends because more people who are in work are needing help.
In Manchester city centre the Wood Street Mission charity collects children's clothes, games and toys to be distributed to families who need them.
Jan O'Conner from the Charity told Sky News: "Last year we helped 15,000 people including 10,000 children. This year demand has gone up by around 10%."
She added: "We are seeing more people who are in work. People are often very embarrassed to ask for help.
"We've seen people who have donated to that service now having to use the service."
Poverty is usually defined by the Government as earning less than 60% of the median income.
The Oxfam report, entitled "The Perfect Storm", says the number of people in temporary work because they can't find a permanent job has risen by 73%, meaning there are now 1.4m "frustrated part-timers" in the UK.
Since the start of the recession in 2008, 830,000 permanent full-time jobs have been lost while half a million part-time jobs have been created.
The report also says that average earnings fell by 4.4% last year while the cost of food has risen by 30.5% in five years.
Reacting to the report, a spokesperson for the Department for Work and Pensions said: "Over the last decade vast sums of money have been poured into the benefits system in an attempt to address poverty - £150bn was spent on tax credits alone between 2004 and 2010.
"This approach has failed, with the UK likely to miss its own 2010 child poverty targets. We need to address the root causes of poverty including worklessness.
"The Universal Credit will replace a complex mess of benefits and tax credits and make work pay.
"It is estimated that Universal Credit could lift 350,000 children and 550,000 adults out of poverty."