All workers should be paid at least the living wage by 2025 the UK Government's social mobility tsar has urged as it emerged Scotland no longer has the lowest child poverty levels in the UK.

At the launch of a report, former Labour Cabinet minister Alan Milburn said too many working parents did not have enough money to live on. He also said thousands more parents would benefit from extra classes on how to raise their children.

And he called for benefits to well-off pensioners, such as free television licences, to be cut and the money used to reduce child poverty rates.

The Social Mobility And Child Poverty Commission report found the problem is now worse in Scotland than in England.

This year 19 per cent (180,000) of Scottish children were in relative poverty, defined as a household with less than 60 per cent of current average income, up from 15 per cent (150,000) last year. In England the rate was 17 per cent.

The report states that in Scotland: "In common with the rest of the UK, progress in reducing child poverty has stalled."

It adds: "The Scottish Government highlights welfare reform as the likely driver, but the same welfare policies have not caused a corresponding rise in poverty across the rest of the UK."

However, it praises Scottish ministers moves to tackle poverty, including the push for a living wage.

Scottish ministers should take further action to close the gaps in educational access while 10 per cent of the most deprived youngsters should go to Scotland's "ancient" universities by 2020.

Mr Milburn said there was a risk poverty would create a "permanently divided" society.

His report warns: "2020 could mark a watershed between an era in which for decades there have been rising living standards shared by all and a future era where rising living standards will bypass the poorest in society."

The potential repercussions include young people permanently locked out of home ownership and a rise in gated communities, he predicted.

Most people who currently live in poverty are working, he said, as he criticised Chancellor George Osborne's plans to cut in-work benefits if the Conservatives win the next General Election.

He also accused Labour of a lack of "ambition" over its pledge to raise the minimum wage to £8.

John Dickie, director of the Child Poverty Action Group in Scotland, said increasing child poverty was "no surprise, but that makes it no less shocking". He said the rise was "largely" a result of the UK Government's real-term cuts to tax credits and benefits.

Mr Miliburn also called for a cut in childcare tax breaks for families where one parent earns more than £100,000 a year, to fund extra classes on parenting, which he said had a higher impact on a child than wealth, class or schooling.

Mike Kelly, from accountants KPMG, said that becoming a living wage nation by 2025 was a realistic ambition.

"The fact remains that more than five million people are earning less than they need to live on."