Rishi Sunak, Britain's finance minister, has plans to freeze the lifetime allowance for the rest of the current parliament in a 'stealth tax' on the wealthy, according to The Times of London.
The allowance freeze will raise £250m a year, The Times reported. If the lifetime allowance rose alongside inflation, as it currently does, it would increase by a further £88,900 by the end of the current parliament.
The article appeared on the front page of The Times on Friday and headlined 'Sunak's tax raid on pensioners'.
The story also quoted former pensions minister Steve Webb, who said: "At present, only a small number of people pay a tax charge when they exceed the lifetime allowance. But a long-term policy of freezing the limit could have implications for well over a million workers saving for retirement."
The lifetime allowance peaked at £1.8m in 2011/12 before being reduced back down to £1m by 2016/17. It has then risen by the consumer price index each year since then and is currently set to increase to £1,078,900 for the 2021/22 tax year.
In other tax measures, Sunak is reportedly also looking to freeze the higher rate threshold for income tax at £50,000, a change that would raise £1bn for the Treasury's coffers, the newspaper reported.