REEVES EYES £7BILLION PENSIONS TAX RAID

CHANCELLOR RACHEL Reeves is eyeing up a £7billion tax raid on pensions in a desperate bid to plug a black hole in her Budget.

- Jonathan Walker WHITEHALL EDITOR

Experts warned she could push up taxes both on pension contributions paid by working people, and on withdrawals by retirees. Campaigners representing pensioners said many had already seen their spending power ravaged by inflation, and were struggling to cope with soaring food and energy bills.

Shadow Chancellor Sir Mel Stride said: "Pensioners who've worked hard and saved responsibly should not be the Chancellor's cash machine." Economists at Oxford Economics warned Ms Reeves will be forced to find savings of up to £30billion in her November 26 Budget, including £6billion caused by the Government's U-turn over cuts to benefits and the winter fuel allowance following a rebellion by Labour MPs.

Tax revenues will also be lower than hoped, thanks to the economy growing more slowly than predicted.

The Chancellor could make "modest" spending cuts but is expected to find most of the money from tax rises.

Options include raising £3billion by setting a uniform 30% rate for tax relief on pension contributions, which would mean the Treasury seizes more cash from higherrate taxpayers saving for retirement.

Ms Reeves could also impose National Insurance for the first time on the £50billion contribution that employers make to staff pension schemes, raising £2billion.

Another £2billion may come from cutting the lump sum that people can take tax-free from pension savings to £100,000, down from £268,275 today.