Prudential has found that much of the rise in millionaires is down to a rise in the amount being held workplace and personal pensions, as well as the amount of private investments held by pensioners.

But while having such high-valued assets means that such pensioners are undoubtedly well-off, much of their wealth is locked up in property or insurance products that pay them an income in retirement.

A million pounds doesn’t buy what it used to either. If the million was saved entirely in a pension pot, you could only expect it to be a unit-linked annuity income of around £35,000-a-year in retirement.

And £1million today is the equivalent of £650,000 at the start of the millennium, once the figure has been adjusted for RPI inflation, or £730,000 a decade ago.

Rocketing property prices have also had an effect, though not as much as one might think, with average net property values for retired couples rising by £10,000 in the last eight years.

Prudential says that the over-65s now have a greater proportion of millionaires than any other age, with 11 per cent compared to the 9 per cent of total UK households worth more than £1million.

Vince Smith-Hughes, of Prudential, said: ‘These results challenge a few commonly-held perceptions.‘For example, it is perhaps surprising that the proportion of pensioner wealth accounted for by pension assets and savings and investments has grown far quicker than the relative value of property assets over the last few years.

‘The figures underline the importance of people saving as much as possible as early as possible in their working lives, to enable them to secure a comfortable income in retirement.’

Total wealth is calculated by combining four asset strands: property, private pension savings, other savings and investments, and the value of possessions.

The study found that the average worth of private pension assets has risen to £82,300, compared to £60,000 in 2006 to 2008.Meanwhile more and more pensioners have large amounts saved in other savings and investments, with 19 per cent of over-65 households holding nest eggs worth more than £100,000, compared to 15 per cent in 2006/08.

But while more pensioners are becoming wealthy in retirement, the Prudential analysis also found that those on the other end of the spectrum are struggling.

It found that 12 per cent of pensioner households are worth less than £40,000, while the same number have net savings and investments worth less than £500.

Published online at on 18th July 2014 by Adam Uren