Some 40% of people from ethnic minority backgrounds are living in poverty, the Joseph Rowntree Foundation has said.
The figure is twice as high as it is for white people, and rises to 65% for those of Bangladeshi origin, it says.
The charity's research also suggests minorities are still overlooked in the workplace compared with others, despite often having better qualifications.
It says government policy needs an "urgent rethink" but ministers insist new measures are being considered.
The foundation classifies individuals and families with incomes 60% of the national average as living in poverty, a measure also used by the government.
The foundation said more thought needed to be given to how assistance was targeted to minority groups to ensure equal opportunity in the workplace.
Publishing a series of reports examining the link between poverty and ethnicity, the foundation said 40% of people from minority backgrounds were currently living in poverty.
This figure rose as high as 55% for those from Pakistani backgrounds and 45% for black Africans. Almost one in three of those from Indian and black Caribbean backgrounds are below the poverty line.
Success in raising educational standards among minorities had not been rewarded by commensurate progress in the workplace, the reports found.
Pakistani and Bangladeshi men with degrees were less likely to be employed than their white counterparts while women from Asian backgrounds suffered high levels of unemployment.
These problems were not confined to first generation immigrants, it concluded, with British-born individuals from minority backgrounds less likely to be in work than their white equivalents.
"Although the past decade has seen some improvements, there are still some very serious problems which remain unsolved," said foundation director Julia Unwin.
"This research shows how policies need to address the different situation of each group and be followed through on a practical level."
Employment and Welfare Reform Minister Jim Murphy said the lives of ethnic minority groups had improved over the last decade but acknowledged more needed to be done.
"The City Strategy programmes, a new partnership between government and providers, will help to tackle worklessness amongst ethnic minority communities," he said.
"The Ethnic Minority Employment Task Force will be proposing new ways of tackling employer discrimination ahead of a ministerial summit early in the summer."