'The Chancellor has removed one of the best ways people can boost pension pots'

THE Chancellor announced plans to hammer hardworking Britons saving for their retirement with a £5billion raid on pension savings.

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Rachel Reeves confirmed long-term rumoured plans that the government will bring in a cap on salary sacrifice pension schemes from April 2029 limiting to just £2,000 the amount workers can save per year without incurring national insurance.

The decision, revealed in yesterday's Budget, will pocket £4.7billion for the Chancellor by the end of this parliament and forms a sizeable part of the "smorgasbord" of tax rises announced.

It was immediately condemned by experts as a levy on savers - and for causing yet more damaging uncertainty for businesses.

Ms Reeves told Parliament that the scheme had originally been intended as a "small part of our pensions system" - but revenue lost because of it will likely triple from £2.8billion in 2017 to £8billion by 2030.

She argued that the greatest benefit of salary sacrifice pensions was going to the highest earners, such as those in the financial sector avoiding tax on their bonuses.

Sacrifice

The Chancellor insisted: "It is a pragmatic step so that people, especially on low and middle incomes, can continue to use salary sacrifice for their pension without paying any more tax than they do now."