The boss of Britain’s largest pensions firm urged Rachel Reeves to rule out a tax raid on retirement pots, as she faces mounting pressure to boost defence spending.

Standard Life chief executive Andy Briggs said savers needed certainty that the pension tax system is not ‘going to keep changing’ so they can plan properly for later life.

‘My view is that pensions need a multi-decade policy approach,’ he told the Daily Mail.

‘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.’

His comments came as Reeves faces a growing backlash over her refusal to ramp up UK defence spending and instead use soaring tax receipts to fund ballooning benefits payments.

The Chancellor is said to be resisting calls to fill a £28billion black hole in the defence budget, and is even calling on military chiefs to make savings of £3.5billion this year. And as pressure mounts to bolster Britain’s armed forces, it is feared she will turn to pensions to raise funds.

Pension savers can withdraw up to 25 per cent of their nest eggs tax-free from the age of 55, up to a maximum of £268,275.

Reducing that threshold was seen as a tempting target for Reeves in her first Budget. That speculation prompted a surge in those pulling money out of retirement funds to pre-empt any rule change. In the end, Reeves decided against such a tax raid.

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