The gap between rich and poor in the UK is as wide as it has been for 40 years, the Joseph Rowntree Foundation warns.
The JRF found that households in already wealthy areas had become "disproportionately" richer compared with society as a whole.
But the social policy think tank said the number of "poor" households had risen over the past 15 years.
Since the 1980s, wealthier people have moved to the suburbs while the poor remain in inner cities, the JRF added.
Looking at wealth patterns over the past four decades, the JRF found that the gap between rich and poor actually narrowed in the 1970s.
But during the 1980s and 1990s inequality had increased, as a "polarisation" in British society had occurred.
As for the decade beginning in 2000, the report said the picture was "less clear", with some initiatives such as tax and pension credit helping the poor while wealthier people were gaining from a property market boom.
Rich and poor are also less likely to be living next door to one another than in the 1970s, it was reported.
The report concluded that "both the poor and wealthy have become more and more clustered in different areas".
The wealthiest of households, defined by JRF as "exclusively wealthy", are concentrated in suburban pockets, usually in the south of England.
Meanwhile a separate report into public attitudes to wealth inequality, also produced by the JRF, found some unease.
"There is widespread acceptance that some occupations should be paid more than others: but the gap between high and low paid occupations is far greater than people think it should be," said Michael Orton, the author of the report.
Mr Orton added that people are more likely to think that people at the top of pay scale are paid too much rather than people at the bottom paid too little.
Reaction to the report from politicians has been mixed.
Minister for Employment and Welfare Reform Caroline Flint pointed to tax and benefit changes since 1997 designed to alleviate poverty.
"Since 1997, 600,000 children and over one million pensioners have been lifted out of poverty," Ms Flint said.
"Thanks to reforms of the tax and benefits system, the average household is £1,000 better off than 10 years ago."
But the Liberal Democrats said the report highlighted falling social mobility and that a quarter of the population are being left behind.
"This left-out 25% is in danger of feeling totally marginalised from mainstream society, which will breed high levels of disillusionment, crime and exclusion," said David Laws, Liberal Democrat spokesman.
Likewise, David Davis, Conservative shadow home secretary, said that opportunities for the least well-off were "flatlining".
"Not only is this a loss of opportunity for young people and a tragedy for families and individuals trapped at the bottom of the pile - it is also a massive loss of talent and creativity for our nation," he said.