Entitled “Families at Risk”, the report was based on a detailed examination of official data which showed poverty and social exclusion affected some 2.1 million children.
The study was released as top UN expert Philip Alston was due to wrap up a 12-day fact-finding visit to investigate poverty in Spain.
In the report, Save the Children identified the largest category of people struggling were larger families living with grandparents, with nearly three-quarters — 73.8 percent — suffering moderate to severe poverty.
In these families, the adults typically had a low level of education, with only 30 percent continuing their education up to the age of 15 — a figure likely explained by the presence of older relatives.
By far the most vulnerable category was that of single mothers, with more than half suffering from severe poverty, six out of 10 mothers unemployed and 90 percent saying they couldn't afford unexpected costs like buying glasses for their children or footing the bill for a broken fridge.
Migrant families were found to be at particular risk, with a third of homes saying they couldn't afford to pay their monthly gas, electricity and water bills.
'One in every four homes'
Andres Conde, head of Save the Children in Spain, urged the government to urgently approve measures that will have a significant social impact for the most vulnerable families in the next budget.
“This social scourge which affects one in every four homes with children can only be fought with investment,” he said in a statement, noting that Spain only invested 1.3 percent of GDP in family allowances compared with an average of 2.4 percent in other OECD countries.
“The state needs to reduce inequality and poverty among the most needy families and it isn't doing it,” he said.
Socialist Prime Minister Pedro Sanchez's new government took office last month, a coalition with the radical leftwing Podemos that has its roots in the anti-austerity protest movement that gripped Spain in the early part of the last decade.
One of its first priorities will be to pass the state budget, but it is likely to struggle to do so, having only a minority of 155 mandates in the 350-seat assembly.