HMRC pension warning issued to households ahead of October decision

Speculation Labour could target pension pots at October Budget

HMRC could be targeting pension pots amid reports of a planned "tax raid". Labour will announce its first Budget for 15 years on October 30 and all eyes will be on any tax hikes announced by Chancellor Rachel Reeves.

She has ruled out tax increases targeting "working people", such as income tax, National Insurance and VAT. That has led to speculation pension pots could be targeted instead, along with measures on capital gains and inheritance.

The Treasury is reportedly considering reducing the pensions saving limit allowing people to withdraw 25% of their savings tax free. This currently goes up to a maximum of £268,275 but could be brought down to £100,000.

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It would mean wealthier people with bigger pension pots being affected - and have to pay tax if they want to get to their money. The measures would impact anyone who has built up over £100,000 of pension savings.

It's thought Labour sees this as a potential way to raise money to boost the economy, the Telegraph reports. At Prime Minister's Questions on Wednesday, Keir Starmer declined to confirm whether National Insurance would not be increase for employers as well as employees.

Some tax rises are widely expected at the Budget on October 30. And after repeatedly ruling out increases to income tax, National Insurance and VAT, the Chancellor has been forced to look for other ways to raise money.