A sustained rise in children’s well-being has gone into reverse during the economic downturn, leaving millions of young Britons mired in insecurity, unhappiness and isolation.

This the key finding of a study by the Children’s Society, which established that 10 per cent of the UK’s 12 million children now have a sense of low well-being and a fifth – 2.4 million young people – can be defined as failing to “flourish” in terms of their life satisfaction.

The findings suggest that the UK’s steady rise from the bottom of international league tables of child well-being and welfare between 1994 and 2008 has come to a halt during the subsequent years of austerity, with young Britons increasingly beset by dissatisfaction. One indicator, based on socio-economic data, suggests there has already been a 1 per cent drop in children’s overall well-being between 2008 and 2010 – a trend which is expected to have continued.

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The decline is particularly marked among teenagers aged 14 and 15, who were found to have the lowest life satisfaction of all children and be the most likely to be unhappy about school, their appearance and the amount of freedom they enjoy.

About 15 per cent of these younger teenagers were found to have low well-being, compared to 4 per cent of eight-year-olds.

The authors of the report, based on economic and social data alongside interviews with 42,000 children, said it was vital for all levels of society to tackle the issues raised by the study. Matthew Reed, chief executive of the Children’s Society, said: “It is incredibly worrying that any improvements this country has seen in children’s well-being over the last two decades appear to have stalled. These startling findings show that we should be paying attention to improving the happiness of this country’s teenagers. They are facing very real problems we can all work to solve, such as not feeling safe at home, being exposed to family conflict or being bullied.”

The study is the latest piece of research highlighting the disparity between the UK’s status as the world’s sixth-largest economy and its poor performance among developed nations on child welfare. In 2007, Unicef put Britain at the bottom of a league table for child well-being across 21 countries. The latest assessment by the UN’s children’s agency found the UK had climbed to 16 out of 29 countries, placing it behind Slovenia and Portugal. But it highlighted persistent problems with Britain’s high rates of teenage pregnancy, numbers of young people out of work and education, and one of the worst alcohol abuse records among 11 to 15-year-olds. It warned young people’s situation was “expected to worsen” as a result of the austerity programme.

The Children’s Commissioner for England reported last month that more than 500,000 more children will be forced into poverty by 2015 because of tax policies and benefit changes, with the poorest children the worst hit by welfare reforms.

The latest study suggests that the correlation between the economic downturn and child well-being is complex, with differences in household income accounting for just 2 per cent of the fluctuation in children’s life satisfaction.

The Children’s Society found some four-fifths of children were also flourishing, meaning they were average or above average in measures of life satisfaction and well-being. It also found a steady decline in well-being between the ages of eight and 15 was reversed by the age of 17.

But the research showed that the low well-being suffered by 10 per cent of Britain’s young people – defined by socio-economic indicators such as health or material income and how children evaluate their own lives – has dramatic ramifications for their family life and emotional health.

Compared to those with average to high well-being, children with low life satisfaction were eight times more likely to feel there was conflict in their family; nearly five times more likely to have been recently bullied; and three times more likely to feel they did not have enough friends.

Case study: ‘Teachers made no effort to combat the problem’

Lily Chamberlain, 17, from Felixstowe in Suffolk, was a victim of bullying and said she was “deeply concerned by the lack of emotional and physical support” available to school pupils.

“Over the past seven years I’ve attended two small private schools. At my former school, bullying was a horrendous problem. Parents had no leverage and the teachers made no serious efforts to combat the problem, besides providing the offenders with the odd cross word or detention. Many children were forced to move schools and yet nothing was done. My experience at my current school has proved that this doesn’t have to be the case. We have a skilled and non-judgmental counsellor we can talk to if we have trouble and the school isn’t afraid to expel students who prove to be a problem. I only wish this were the case at other schools I’ve attended. Everyone needs an independent party to go to for comfort and help; one who is both close to home and has a fair amount of leverage with the school.”