Britain’s largest pensions provider has called on Rachel Reeves to commit to leaving retirement savings untouched as rising defence spending pressures fuel concerns about potential tax changes.
Standard Life chief executive Andy Briggs said savers require long-term certainty to plan effectively for retirement.
Mr Briggs said: “My view is that pensions need a multi-decade policy approach.”
He warned that speculation about rule changes risks undermining confidence and discouraging saving.
Mr Briggs added: “If you get speculation each year, if there’s any sort of doubt in people’s minds that the system is going to keep changing all the time, that is going to have the impact of people saving less, not more in an environment where only one in seven is saving enough today for a decent retirement.”
The Chancellor has faced criticism over her approach to defence spending, with reports suggesting she is resisting pressure to address a £28billion shortfall in the budget.
She is also understood to have asked military leaders to identify £3.5billion in savings this year.
As calls grow to increase defence funding, some industry figures have raised concerns that pension savings could be targeted for additional revenue.
Pensions boss urges Chancellor to rule out tax raid on retirement savings
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Under current rules, savers aged 55 and over can access up to a quarter of their retirement funds tax-free, capped at £268,275.
Reducing this threshold had been widely discussed ahead of the Chancellor’s first Budget, prompting some savers to withdraw funds early.
Mr Briggs said: “Lots of customers took their tax-free cash.”
He added: “They are now worse off by having that money in a tax environment rather than a tax-free one.”
State pensioners could face a tax raid on their pots | GETTY
Mr Briggs said: “We are concerned that if there is speculation on pensions the whole time around the build-up to the Budget, you end up with consumers making suboptimal decisions.”
Standard Life recently completed a £2billion acquisition of Dutch insurer Aegon’s UK operations, increasing its position in the pensions market.
Pensioners are also affected by frozen tax thresholds, which have remained unchanged since 2021.
An additional 600,000 retirees are expected to pay income tax in 2026/27, with projections suggesting one million more could be affected by 2030/31.
The full new state pension stands at £11,973 annually, close to the £12,570 personal allowance, which is frozen until 2031.
An Assistance for Seniors spokesman said: “We are fast approaching a point where simply receiving the full state pension, alongside even a modest amount of savings interest, is enough to trigger a tax bill.”
The spokesman added that the issue is no longer limited to those with larger pension pots.