The UK Labour party shadow Chancellor has said they would reinstate the lifetime allowance (LTA) on pension savings after the chancellor yesterday announced it would be scrapped as part of his Budget reforms.

Jeremy Hunt yesterday told MPs the £1.07m limit on tax-free pension saving would be removed. It had been predicted he would increase the allowance to £1.8m but instead removed it altogether.

The opposition has today said it would reverse the move. The BBC reports shadow chancellor Rachel Reeves said the decision was "the wrong priority, at the wrong time, for the wrong people".  

Labour said in a statement that the policy move would benefit the "top 1% of pension savers getting a massive tax break for their retirement". Its own analysis found such savers would benefit to the tune of £45,000.

Reeves added: "That's why a Labour government will reverse this move. We urge the chancellor and the Conservative government to think again too."

Canada Life technical director Andrew Tully said it was wrong to play "political ping pong" with the pension system.

"People plan for the long term and that relies on confidence the goalposts won't constantly shift. We need cross-party consensus on issues like this to deliver the stability required or else we seriously risk wrecking savers' retirement plans.

"There are already restrictions in the system limiting pension savings and tax breaks - just let the annual allowance do the job it is designed to do," he added.