Pensioners could lose £32,000 if Britain leaving the EU shocks markets, a Treasury analysis has found.
The Treasury suggests that Brexit will lead to an increase in inflation and financial market turmoil which will, in turn, lead to millions of current and future pensioners being worse off.
The study, which is the latest in the string of Treasury reports calling on people to vote Remain, angered Vote Leave that branded the report an "outrageous attempt" by the government to do down people's pensions".
The Treasury said that assets held by those aged over 65 could drop by £170bn in value if markets suffer shocks with losses rising to £300bn in the event of severe market shocks.
Meanwhile, the average pensioner will lose £18,000 in the event of a market shock and around £32,000 in the severe market shock scenario.
Those expecting to retire around 2030 – today’s 50- to 55-year-olds – would see their pension contributions and investment returns shrinking as wages will be lower and companies’ profits and dividends will fall.
The study found that a vote to leave is expected to push up price inflation by around 2.5 percentage points after a year, from well below 2.5% to above that level.
Chancellor George Osborne, who recently claimed that Brexit would trigger a recession, said: “Pensioners who have worked hard all their lives deserve dignity, security and certainty in retirement. That’s what we all hope for and what any responsible government should seek to provide.
“As chancellor, I feel very strongly that my first responsibility is for people’s jobs, livelihoods and living standards.
“I couldn’t recommend something that we know would put all that at risk.”
Ros Altmann, the pensions minister, said: "Millions of current pensioners would feel the impact of voting to leave the EU through inflation eroding their pensions as consumer prices rise and as volatility in financial markets hit their hard-earned pension savings, as well as suffering a fall in the value of their assets, including house prices."
Treasury's report branded "outrageous"
Vote Leave argued that inflation will not rise if Britain leaves the EU and that Sterling has appreciated since David Cameron called the vote.
Former pensions secretary Iain Duncan Smith branded the Treasury’s report as a “cynical attempt to distract from the government’s broken promises on immigration”.
“The biggest threat to British pensions is the European Commission’s proposals to undermine occupational pensions which the government themselves have described as ‘damaging and reckless’. Meanwhile tax proposals from Eurozone countries will wipe billions off British assets hitting pension funds hardest” he said.
“These are measures that Britain is powerless to stop in the EU. Remember we have been outvoted again and again and lost each battle. After 30 years there is still no proper open market in services and the UK has lost out and continues to lose out.”