By interviewing more than 30,000 children aged eight to 16 about what makes them happy, the charity identified essential elements for a happy childhood.
The biggest impact comes from having choice and family, according to The Good Childhood Report 2012 findings.
While politicians and faith leaders talk about the importance of marriage and two-parent families, this research shows that it is not structure, but the relationships within a family that matter most to children.
Loving relationships between a child and their family were found to be ten times more powerful than family structure in increasing well-being.
Stability was also found to be a priority when it comes to children’s happiness; children living with changing family members were twice as likely to suffer low well-being, the charity said.
It found low levels of well-being among children who have moved house more than twice in the past year.
Children's age was also a factor. As children get older they experienced higher levels of unhappiness, with children as young as eight being aware of financial issues within their family. Children living in households where incomes have fallen were more likely to feel sad about it.
Friendship groups and bullying can also have an impact on how happy children feel. Children like to feel similar to their friendship groups so those who have a lot less money, fewer clothes or look different have lower levels of well-being, according to the report findings.
About a third of children interviewed worried about how they looked and this increasesd with age. More girls were affected by this than boys.
The impact of an unhappy childhood is profound, the charity said. Children are less likely to enjoy being at home with their family, feel safe with their friends and feel positive about themselves and their future.
Unhappy children are also more likely to be victimised and become depressed or have eating disorders.
Elaine Hindal, The Children's Society's campaign for childhood director, said: "We are calling for a radical new approach to childhood, placing their well-being at the heart of everything we do.
"We know that, right now, half a million children are unhappy. We have discovered the key reasons for this unhappiness and what we can do to make it better.
"We want our country to be the best place for our children to grow up. Yet unless we act now we risk becoming one of the worst and creating a lost future generation.”
The Children’s Society has identified six priorities for a happy childhood and has recommended how they should be adopted by government. These are:
- The right conditions to learn and develop.
- A positive view of themselves and a respect for their identity.
- Enough of the items and experiences that matter to them.
- Positive relationships with their family and friends.
- A safe and suitable home environment and local area.
- The opportunities to take part in positive activities that help them thrive.