Almost two-fifths (39 per cent) of recruits to the Army have the reading ability of an 11-year-old or lower, MPs have warned.
A similar proportion (38 per cent) can only do maths aimed at pupils in their last year of primary school, says a Commons Defence Select Committee report.
The report also raises concerns that 28 per cent of army recruits are aged under 18.
The Ministry of Defence said the armed forces were among the largest training providers in the UK, with "excellent completion and achievement rates".
The research, which examined the education of service personnel, found that the Army, Royal Air Force and the Royal Navy had a reasonable record in improving the maths and English skills of young recruits and trainees who joined up with low levels of qualifications.
It says the minimum entry requirement for new recruits is 'entry level 2', which is the equivalent to the standard expected of a seven- or eight-year-old in literacy and numeracy.
It found all of those who joined the Royal Navy or the RAF in 2012 were above entry level 2.
But 3.5 per cent of army recruits had reading levels at this standard, while 1.7 per cent had this level of ability in maths.
Furthermore, 39 per cent of the army recruits had a literacy level at or below the standard expected for an 11-year-old, and 38 per cent had this level of ability in numeracy.
The report says: "Whilst the committee recognises that some recruits may not have done well in their previous academic careers and may not be eager to take further academic exams, the MoD should encourage more recruits to undertake English and maths GCSEs which would stand them in good stead for future employment."
The committee also says it is worried that the Army appears to be dependent on recruiting 16- and 17-year-olds.
More than one in four (28 per cent) of army recruits are under the age of 18 when they join, compared with five per cent for the Royal Navy and eight per cent for the RAF, the report says.
"Further information is needed on why the Army is so dependent on recruiting personnel under the age of 18 years compared to the other two services, and whether steps are being taken to reduce this dependency," says the report.
Committee chairman James Arbuthnot said: "It is vital we provide excellent education for our personnel not just for their own career development but also to give them confidence that when the time comes to leave the service they will be able to transfer to a civilian career.
"They are more likely to remain in the service if this is the case. We welcome the work that has been done to increase the number of areas where personnel can acquire a civilian qualification and we would like to see this work further extended."
An MoD spokeswoman said: "We take pride in the fact that our armed forces provide challenging and constructive education and training opportunities for young people, equipping them with valuable and transferable skills.
"The services are amongst the largest training providers in the UK, with excellent completion and achievement rates, and the quality of our training and education is highly respected.
"With support for education ranging from entry level literacy and numeracy to full postgraduate degrees, service personnel are offered genuine progression routes which allow them to develop, gain qualifications and play a fuller part in society either in the armed forces or in the civilian world."