Jeremy Hunt ‘to unveil significant pension cap increase’ in Budget

Another cap which could be boosted is the annual pension contribution limit, currently standing at £40,000, which would provide more opportunity for Britons to save per year if it is lifted.

Jason Hollands, managing director at wealth manager Evelyn Partners, said: “If the reports are to be believed, and the Chancellor is set to abandon the planned deep freeze on the pension Lifetime Allowance and annual pension contribution limits, this will be welcome news after the tax raids announced in his Autumn Statement.

“The annual and lifetime pension allowances, which stand at £40,000 and £1.073million respectively, are caps on how much someone can contribute into their pension while still benefiting from tax relief each year and then build-up in their pension before facing punitive tax charges on the excess when they take pension benefits.

“In the case of the LTA, investment growth is included so someone who has made wise investment decisions can be penalised with a tax charge which many will regard as unfair.”