'There is a good chance she will need to come back for more...pension tax looks like a juicy place to go for quite a lot of money

RACHEL Reeves may impose a tax on pension pots in a desperate bid to balance the books as UK debt soars, experts warn.

- By Jonathan Walker and Katie Harris

Leading think-tank the Institute for Fiscal Studies says such savings are a "juicy target", while a stealth rise in income tax and council tax hikes are also possible.

The Chancellor has very little room to manoeuvre as she faces the prospect of her newly restored fiscal headroom from Wednesday's spring statement being wiped out again ahead of the autumn Budget.

She is battling sluggish growth and challenging economic headwinds, which include Donald Trump's tariff crusade.

Ms Reeves issued a plea to the US president yesterday to spare Britain from a 25% levy on car imports. It follows warnings that a tariff war with the US could damage the UK economy and make further tax rises inevitable.

At the same time, the Chancellor and Prime Minister Sir Keir Starmer face a growing rebellion from Labour MPs furious at cuts to benefits which the Government's own predictions show will force 250,000 people into poverty.

The IFS warned yesterday tax rises were likely as it gave its verdict on Ms Reeves' spring statement, with pensions being one of the easier targets.

Director Paul Johnson said: "There is a good chance economic and fiscal forecasts will deteriorate significantly between now and an autumn Budget. If so, she will need to come back for more, which will likely mean raising taxes further."

Mr Johnson said the Chancellor could tax pension contributions, adding: "One of the reasons that I worry about pension taxation is that it looks like a nice juicy place to go for quite a lot of money.