Chancellor Rachel Reeves will announce the autumn Budget this week (Wednesday, October 30), marking the first time a Labour government has had control of the Budget since 2010.

It's expected that Reeves is aiming to generate funds of £20bn for public services through the likes of raising employers' national insurance tax and hikes in capital gains tax.

With speculation around the rise in specific taxes, there are suggestions that the Chancellor will change how pensions are taxed in the Budget. 

According to the BBC, some experts have shared that Reeves could change the system around the workplace or private pensions.

Do Pensioners pay tax?

How could the budget affect pensions? 

Currently, if you are aged 55 and have pension savings, you can take a quarter of the money as a tax-free lump sum with a maximum amount of £268,275.

However, the Chancellor has considered lowering the cap reports have suggested, meaning that people will likely have to pay more income tax when they take their pension.

But, there are still questions about how much more money this could actually make the government.

There has also been speculation around introducing a single rate of pension tax relief, reports the BBC.

At the moment your pension tax refund is the same rate as your income tax bracket, with the basic at 20%.

That means that those with a higher rate will receive a more generous tax relief, at 40% or 45%.

RECOMMENDED READING

However, in rumoured Budget plans, the Labour government could make the relief more fair, with a flat rate of 25%.

The change could benefit lower-earning employees who get a 20% relief in helping reduce their overall tax bill.

But, taxpayers with a higher rate and an annual income of £50,000 could lose out, due to a lower tax relief for them.