I work in a Y1 class and we do have ability groups for literacy and numeracy, plus we have ability related groupings for phonics and for guided readings.
Our school doesn't have ability groupings in reception, but they do in Y1 and Y2.
The ability groups are used for specific tasks, so the teacher can differentiate. IME, in Y1, there is a huge difference between the children's abilities in each area. It appears to work very well, and IME the children are not overly concerned about which group they are in.
With ref to the OP; the children in our lowest ability group are generally behind the average of the class in all areas. Some are EAL and some have SLI. All are on IEPs.
For example,
Literacy/Phonics: the children in my lowest literacy group are still learning individual letter sounds; two are still doing the first few letters entirely. Some can write a letter in respond to a sound, others can only manage a handful, and some are unable to without having a letter shape in front of them to copy from. They are working on initial and end sounds, and not yet really blending.
Numeracy: we are making sure they can accuracly count to 10, understand concept of 1 more, 1 less, can recognise numbers to 10, can form digits, can count back from 10 or 5
Guided reading: on lilac/pink books; not yet blending letter sounds to make words, still working on individual sounds, talking about the pictures, discussing stories, knwing that books are read from left to right, looking for initial sounds, etc.