Experts warn Rachel Reeves is likely to hit pension contributions in the budget to raise billions of pounds.

Sir Steve Webb, a former pensions minister, analysed options the Chancellor will have to find extra money in her statement next month.

He said scrapping higher rate relief on pensions is highly unlikely because it would disproportionately hit public sector workers.

Sir Steve, a partner at LCP suggested a cap on tax-free cash is unlikely for similar reasons.

In a report by the pensions firm released today (mon), the most likely option was found to be a levy on employer pension contributions.

Excluding them currently from National Insurance costs the Treasury a £23.8 billion a year.

Creating a new rate of NI on employer contributions would raise a couple of billion pounds but would not hit paypackets, so would be less politically damaging than other options.

Sir Steve Webb said: “The Chancellor will be looking for relatively simple changes which can be introduced quickly and will raise large sums with least voter anger.

“Changes to taxes on business may fall within that category, and the large cost of exempting employer pension contributions from National Insurance Contributions will not have escaped the Chancellor’s attention.”