The number of millionaires in Britain has risen by a third driven by increasing pension wealth, figures from the Office for National Statistics show. 

The most recent figures, from July 2016, show that there are 3.5m households in the country with more than a million pounds’ worth of assets, up from 2.75m in the 2012-14 figures. 

Overall average wealth rose by 15 per cent to £259,400 by July 2016, though the rising cost of living is not taken into account. 

Private pensions rose in value to £5.3 trillion, a 20 per cent increase from two years earlier, marginally more than the 17 per cent rise in the value of property wealth, which is now worth a total of £4.6 trillion.

A rise in the value of final-salary pensions is behind a large part of the growth, the ONS said, with lower returns in financial markets meaning a higher cash value is placed on the the pension promises that companies have made to employees.

These pensions require companies to pay out a certain amount to members every year from the scheme’s retirement date, but can also be cashed in for a lump sum. 

On average those with one of these pensions, also called “defined benefit” saw its value grow by £15,000 between 2012 and 2016, compared to an average growth of just £1,000 for less generous “defined contribution” pensions. 

Most of those with the more generous pensions are aged between 45 and 54, with almost one in three people in this age group holding an average of £162,900 in one of the schemes. 

Less than 10 per cent of people between 16 and 24 has this sort of pension wealth. 

Conor D’Arcy, senior policy analyst at think tank the Resolution Foundation, said: “Young people in particular are feeling the effects of Britain’s wealth divide. Our large millennial generation own just 2 per cent of the nation’s wealth.”

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