In an analysis published Thursday, the Treasury warned that over 65s, who own their own homes and have non-pension assets, would be £18,000 worse off with a moderate Brexit shock, and £32,000 worse off in the worst case scenario.
The research also claims that should Britain decide to leave the EU on 23 June, those with an additional pension pot worth £60,000 would see its value drop by between £1,900 and £5,200.
Meanwhile, pensioners who receive an annuity income would experience even further losses. Data from the Association of British Insurers (ABI) shows that there were around six million annuities in payment, with an average payment of £2,280 per annum in 2014 – most without inflation protection.
The Treasury predicts that these individuals would lose a real income of around £50 in the year to April 2018, while those with larger annuities would experience larger losses.
Pensions minister Ros Altmann told The Times on Friday, that a vote to leave would put all the “hard work we’ve done to invest in pensions in jeopardy in a self-defeating, pointless and unnecessary way”.
“Older people tend to be more sceptical about Europe than their children and grandchildren but it’s important that pensioners, as well as those planning retirement, realise that they will be worse off it we turn our backs on the biggest free trade single market in the world,” said Altmann.
Facts and figures
The Treasury analysis also looked at the impact Brexit would have on someone aged 50.
According to its data, an individual with pension savings of £20,000, contributing 8% of their earnings into a pension fund between now and 2030, would be between £223 and £335 a year worse off in retirement.
The department predicts that in the event of a Brexit, inflation would rise by 2.5% in the first year, reducing the real value of state pensions, with retirees being £137 worse off each year.
Speaking to the BBC, Britain’s chancellor of the exchequer George Osborne said it's important that pensioners understand what's at stake for them if they choose to leave the EU.
"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," he said.
However, Vote Leave campaigner and former pensions secretary Iain Duncan Smith, lambasted the figures as “an utterly outrageous attempt by the government to do down people’s pensions”.
"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.