One in four British pensioners is now a millionaire

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One in four pensioners in Britain is now a millionaire as retirement wealth has ballooned over the last decade, official figures have shown.

More than three million people over the age of 65 live in households with property and pensions wealth worth more than £1m, analysis of Office for National Statistics data by the Intergenerational Foundation has found.

The number of silver millionaires has nearly quadrupled over the past decade to reach 3.1 million in 2020. More than half now live in households with more than £500,000 in assets, up from 25pc in 2008.

This sharp rise has sparked criticism over the planned universal boost in the state pension next year. The benefit is on track to rise in line with double-digit inflation next April, rising by nearly £1,000 a year.

However, this comes after the Government demanded workers accept a real terms pay cut. The state pension "triple lock" policy means it rises every April, either by the previous September's inflation number, the average growth in wages or 2.5pc – whichever is higher. Inflation is predicted to hit 10pc this autumn.

The Intergenerational Foundation said the number of wealthy pensioners raises questions over the Government's decision to maintain the policy. It called it an "unfair" use of taxpayer money. Angus Hanton, of the charity, said the number of millionaire pensioners also laid bare how the wealth divide had opened up between generations.

He said: "After a decade of above-inflation increases in the state pension, thanks to the triple lock, this analysis raises the question as to whether a potential 10pc increase is the fairest way to deal with poverty."

However, Baroness Altmann, a former pensions minister, said many pensioners are asset rich but cash poor and will be heavily reliant on the bumper state pension increase next April to get by.

"It is outrageous to suggest that just because some pensioners live in a house that has risen in value they are very wealthy. Property prices may have gone up but that doesn’t help them to live, they can’t spend that £1m, they live in the house,” she said.

The UK state pension is the lowest in the developed world, she added. "To say that they don’t need to be protected from rising prices is misguided at best."

Payments increased by 3.1pc in April to £185.15 a week for someone on the full new state pension, a rise dwarfed by the current 9.1pc inflation figure, a 40-year high. Research has shown that retirees will be £10 short every week until next April after they bore the brunt of rising fuel and food costs.

The state pension would have had to rise to £195.95 to keep pace with the current cost of living, a shortfall of £10.80 each week that will leave retirees at least £432 out of pocket.

However, the minister overseeing the policy, Thérèse Coffey, called on wealthy pensioners to pay back the £1,000 extra that would come from an inflation-linked rise in the state pension.