Today just three-in-10 children read daily in their own time compared with four-in-10 young people seven years ago, according to a National Literacy Trust survey of 21,000 children and teenagers.
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More than one in five (22%) of those questioned said they rarely or never read in their own time, while 17 per cent said they would even be embarrassed if their friends saw them reading.
Despite the proportion of children who said they enjoyed reading very much or quite a lot has remained the same since 2005 - at around 50 per cent - more than half of those questioned (54%) said they preferred watching TV to reading.
In 2005, some 77 per cent of children read magazines, but now the figure is 57 per cent.
Comic reading has also dropped from 64 per cent in 2005 to 50 per cent today, and reading on websites has fallen from 64 per cent to 50 per cent, according to the findings.
The National Literacy Trust said the results of the survey highlighted "a clear issue with children's leisure time with many children enjoying reading but pushing it out in favour of other activities".
Research has shown a clear link between reading outside of class and children’s achievement, it said.
And added that young people who read outside of class daily were 13 times more likely to read above the expected level for their age.
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Children in the UK are currently ranked 25th out of 65 developed countries in reading.
Jonathan Douglas, director of the National Literacy Trust said: "The fact that children are reading less than in 2005 signals a worrying shift in young people’s literacy habits. We are calling for the Government to back a campaign to halt this reading decline and to give children time to read in their daily lives.
"We believe we need to inspire a new generation to read in the same way that the Olympics is inspiring a new generation to take part in sport.
We need to make reading irresistible. We want to call on families and professionals working with children and young people to make ten minutes in their day for reading."