Any salary sacrifice clampdown ‘would hit pension savers, firms and economy’

Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, said: “Restricting salary sacrifice on pension contributions could cause long term damage to people’s retirement prospects.

“We could see employees becoming less likely to increase pension contributions beyond auto-enrolment minimums.

“In addition, the extra burden on employers means they will not only be less likely to increase their own contributions, but they may also restrict future salary increases.

“With data from HL’s Savings and Resilience Barometer showing that only 43 per cent of households are on track to achieve an adequate retirement income we need to make sure that the right incentives are in place to help people save for the long term.”