Marvin OnumonuPensions UK and the Federation of Small Businesses (FSB) have written to the Chancellor, urging her not to change salary sacrifice or pensions tax relief rules in the next Budget.
Research found 91% of Pensions UK’s members were worried about possible pension tax changes.
Nearly all (97%) agreed leaks and rumours were knocking confidence in pension saving, while 87% said the speculation showed a lack of long-term policy stability.
Almost two thirds (61%) of respondents were pessimistic about the Budget, expecting it to make the public view pensions more negatively.
Over a third (35%) of schemes had already seen more members contacting them, mainly about taking out tax-free cash.
Of those getting more queries, 77% reported difficulties keeping up with the volume.
Three-quarters (75%) believed savers were likely or very likely to change retirement contributions or decisions if the suggested reforms went ahead.
Around half of those surveyed wanted reforms to focus on making things simpler, fairer and better for lower earners.
Two out of five (40%) did not want a wider review of pensions tax relief.
The letter raised three big concerns: the risk of long-term damage to public trust, the impact on employers and growth, and the strain on administration.
It said more changes could weaken the foundations of the pensions system.
Additionally, Pensions UK said it was not against sensible tax reform, but pointed out that recent inheritance tax changes were still settling in and had already added pressure.
Zoe Alexander, executive director of policy at Pensions UK, said: “The pension system relies on stability and predictability.
“Savers and employers can only plan with confidence when the rules are clear and consistent.
“Any change to salary sacrifice would inject uncertainty into a system that needs long-term trust, not sudden shocks.”
Alexander added: “It would add operational pressure for employers and risk undermining the retirement prospects of working people across the country.
“The Government should provide clarity now and commit to maintaining salary sacrifice.
“Introducing a cap would weaken incentives to save when we are facing a generation retiring with inadequate retirement savings.”
She said: “At a time when the Pensions Commission is working to set a long-term course for pension saving, a clear commitment to stability would give savers and employers the certainty they need to keep contributing, planning effectively and supporting economic growth.”
