Retirees are the most satisfied with their lives, according to a study by the Office for National Statistics (ONS).

Freed from the daily grind of working, and especially the cost and inconvenience of commuting to work, pensioners say they have more time for recreation and spare cash to refresh their homes and to visit hotels and restaurants – all things that improve life satisfaction levels.

They feel happier than people who are self-employed as well as workers with dependent children, and retirees are two and a half times more likely to feel satisfied with life than people who are unemployed or disabled.

The main caveat to the general wellbeing of Britain’s almost 12 million people over 65, and the many people who have taken early retirement, is whether they have poor health and are widowed, separated or divorced. If their preference is to live with a long-term partner, but they are on their own and in poor health, their satisfaction rating plummets, the ONS says.

The report comes after two decades of improving living standards that started with increases in the basic state pension by Tony Blair’s New Labour government and continued under David Cameron and Theresa May.

A legacy of generous occupational retirement schemes have also boosted the incomes of millions of retiring workers over the same period. A recent study by the Intergenerational Foundation found the number of former public sector workers in receipt of pensions higher than the UK’s average annual salary of about £28,600 hit 115,000 in 2017-18, up 46% from 78,000 in 2010-11.

This improvement has coincided with a large rise in the proportion of people over 65. In 1997, around one in every six people (15.9%) were aged 65 and above, increasing to one in every five people (18.2%) in 2017. The proportion of over-65s is projected to reach about one in every four people (24%) by 2037.

The report, Personal and economic well-being: what matters most to our life satisfaction, found money made little difference to wellbeing when every extra penny was spent on food and travel and children and other essential items. Extra income, even small amounts, only make a difference to satisfaction levels when it is spent on goods and services people have chosen to buy, rather than those things they feel they must buy.

A retired person, according to the ONS’s calculation, will have a 4.84% higher satisfaction rating than the average person in some form of employment. An unemployed person will have a satisfaction rating 7.58% lower than the average worker.

The ONS said wealth was a key factor in improving the wellbeing of older people.

“One of our previous studies shows that higher wealth, particularly financial wealth, is positively associated with higher life satisfaction, and older people tend to have higher wealth,” a spokesman said.

He said spare time was another bonus for the retired, as long as they were able to spend the time on recreational activities which promote their wellbeing.

Previous ONS reports have also shown that older people reported being more satisfied with their income, leisure time, felt able to cope financially and more part of their local community, than younger people.