It means up to eight million people are so poor at reading and writing that they struggle in their daily lives. In a devastating condemnation of the British education system, they have difficulty reading a medicine label or simply using a chequebook, the Sun reported.
The findings by the World Literacy Foundation are contained in a report which focused on the world's wealthiest nations. Its chief executive Andrew Kay described the findings as "shocking" for Britain.
Britain with 21.8 percent has been ranked third-worst in reading and writing behind Italy (47 percent) and Ireland (22.6 percent), he said. "No matter whether you live in the developed or developing world, poor literacy is ruining lives."
The US was found fourth-worst with 20 percent in "functionally illiterate" adults category.
British pupils have slipped from the world's seventh best in reading to 25th, according to a separate study by the Organisation for Economic Co-operation and Development.