TWO decades of progress on tackling poverty in Scotland is at risk, a report has warned, as new figures show 29 per cent of children will be living in poverty by 2021.

Scotland's strong record on poverty risks "unravelling" because of soaring housing costs, in-work poverty and the UK social security freeze, the Joseph Rowntree Foundation said.

The latest state of the nation report from the JRF, one of the UK's leading authorities on poverty, finds that Scotland has made significant headway on reducing poverty over the last 20 years.

Poverty is lower in Scotland than in the rest of the UK and has achieved deeper and more sustained reductions in poverty among pensioners and families with children.

However an increase in child poverty is described in the report Poverty in Scotland as a "very worrying trend".

The report found that 37 per cent of the lowest-income households now spend more than a third of their income on housing. This is a commonly used indicator of high housing costs and the figure has increased sharply since 1997 when fewer than a quarter of households did so.

Housing costs are also leading to widening inequality. The poorest fifth of households are much more likely to be living in sub-standard housing than the richest fifth, (51 per cent compared with 32 per cent). This gulf has increased since 2005 from 8 percentage points to 19 points.

Campbell Robb, chief executive of the Joseph Rowntree Foundation, said:

“Scotland has a proud record in reducing poverty over the last 20 years. It has meant thousands of families across the country have enjoyed better living standards, financial security and better prospects.

“But Scotland stands at a turning point as the challenge facing families on low incomes changes. The rising cost of housing and the challenge of low-pay and in-work poverty – as well as the impact of UK social security decisions - mean the country’s progress is in peril.

“Scotland’s record shows progress can be made with sustained effort, but these findings highlight that these gains are fragile and need to be protected. The upcoming Budget provides a chance to tackle the long-term drivers of poverty and fix the foundations for the next generation of families.”

The report comes a day after Scottish Government figures revealed that one in five children live in families where material deprivation coincides with low incomes leaving their parents unable to afford basic goods.

Equalities Secretary Angela Constance said Scotland's ambition on child poverty was shown by the fact that the Scottish Government was the first in the UK to set targets for addressing the problem.

"The Child Poverty Bill, passed unanimously by Parliament, also sets out the positive action we are taking to prevent further generations of children growing up in poverty and will be backed by our Tackling Child Poverty Fund worth £50 million," she said.