The government’s decision to introduce a single lifetime allowance in place of the manifold tax schemes previously in operation was singled out for praise.

CIPD pensions adviser, Charles Cotton, stated: “The chancellor’s radical decision to shift from eight pensions tax schemes to a single lifetime allowance is welcome.

“As is the sensible decision to lift the cap on the new allowance from the existing £1.4 million to £1.5 million in 2006 and £1.8 million in 2010.”

However, Mr Cotton added: “We are disappointed that there is nothing in the Budget to encourage employers to contribute to the pension schemes of their employees, or to encourage employees to save for their old age.”