Clever children from poor families face being overtaken by less bright children from affluent homes, research suggests.
The findings are part of a study for the Sutton Trust which says UK social mobility has not improved since 1970.
It says rich children are catching up with poorer peers in developmental tests between ages three and five and will overtake them by the age of seven.
The government says it is too early to say what will happen to the young people the charity's report focuses on.
But trust chairman Sir Peter Lampl said: "It's a terrible thing that children from poor backgrounds, who are bright, end up actually not getting a very good start in life.
"They end up in schools that aren't very good and end up poor as adults and that's a terrible waste of talent and it's also basically wrong, it's just unfair."
The trust's study by the London School of Economics and the University of Surrey concludes that the UK remains very low on the international rankings of social mobility.
The researchers looked at data relating to children born between 1970 and 2000, to determine whether the decline in social mobility between previous generations had continued.
They found intergenerational income mobility (whether you are richer than your parents or not) for children born between 1970 and 2000 had stabilised.
There had previously been a sharp decline for children born in 1970 compared with those born in 1958.
The report said: "Children in the poorest fifth of households but in the brightest group drop from the 88th percentile on cognitive tests at age three to the 65th percentile at age five."
Meanwhile those from the richest households who are least able at age three move up from the 15th percentile to the 45th percentile by age five.
Report authors Dr Jo Blanden and Professor Stephen Machin conclude: "If this trend were to continue, the children from affluent backgrounds would be likely to overtake the poorer children in test scores by age seven".
They also said while 44% of young people from the richest 20% of households were awarded degrees in 2002, only 10% from the poorest 20% did so.
The report concludes: "Parental background continues to exert a significant influence on the academic progress of recent generations of children.
"Stark inequalities are emerging for today's children in early cognitive test scores - mirroring the gaps that existed and widened with age for children born 30 years previously."
Minister for Children Beverley Hughes said it was encouraging to see that "the previous decline in social mobility in the UK appears to have stabilised".
"As we look to the future we hope to see more evidence of our reforms making a real difference to people's lives," she said.
"This new research is based on the Millennium Cohort born in 2000-01. It's far too early to say what will happen to those young people over their lifetime.
"Those children have yet to enter Key Stages 2, 3 and 4, where overall standards are continuing to rise and poverty gaps have narrowed since 2003."
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