Chancellor Rachel Reeves is playing with words on tax again.

Experts one Chancellor Rachel Reeves could attack our pensions on two fronts (Image: Getty)

On Wednesday, she said she wouldn’t hike any of the big three taxes in her autumn Budget: income tax, national insurance (NI) and VAT.

But that still leaves a lot she can do. Economists reckon she’ll must hike taxes to plug a £30billion spending gap.

She will struggle to cut spending, as Keir Starmer backtracks on the winter fuel payment raid and planned cuts to the soaring disability benefits bill.

Those relatively small measures have triggered a Labour Party civil war.

And she can’t give herself headroom by tinkering with her fiscal rules, as she continues to insist they are “iron-clad” and “non-negotiable”.

Which means she has to raise taxes. She admitted as much on Thursday.

Speaking at a Confederation of British Industry (CBI) dinner on Thursday, Reeves broached the subject of last year’s £40billion Budget tax hikes.

She insisted that she was “never going to repeat anything of that scale”. Again, she’s playing with words. Because she didn’t actually rule out further hikes.

Robert Salter, a director at tax and business advisory firm Blick Rothenberg, insists she has no choice if she’s going to balance the books. “The money has to come from somewhere, and that somewhere is taxes.”

He said billions in pensions tax relief is now “on the chopping block”.

Salter reckons Reeves will attack our pensions on two fronts. First, when people pay into a pension, and second, when they take money out.

Pensions tax breaks cost the government £48billion a year. That’s a huge sum, and a juicy target for Reeves.

Salter reckons she will raid tax relief on pension contributions, which is paid at either 20%, 40% or 45%, depending on your tax bracket.

She could even claim she’s targeting it to be fair.

Salter said she could slash higher rates of pensions tax relief to a fixed rate of 25% for all.

This could be sold as helping basic rate taxpayers build pension. It would also save the Treasury billions. But it will be a huge blow for higher earners.

The Chancellor’s second move would be to shrink the hugely popular 25% tax-free lump sum, which applies when taking money out of a pension.

Again, she could claim she’s being fair.

Today, the tax-free element is capped at £268,275. She could cut that cap to as little as £75,000, Salter said. “It would only hit those with total pension savings above £300,000, so again, Reeves could argue she’s only targeting the wealthy.”

As yet, we don’t know for sure. But Jason Hollands, managing director at wealth firm Evelyn Partners, also reckons a double pension raid is in play.

He says there are other taxes she may hike as well – I’ll be looking at those tomorrow.

Right now, one thing is certain. Reeves is coming back for more tax in the autumn. Whatever she says today.