"The amount that people can pay into their pension pot every year and still receive tax breaks is to be capped at less than a fifth of its current level.

"The maximum size of a pension pot that workers can accrue before high rates of tax apply is also likely to be significantly reduced by the Treasury.

"Accountants predict that the changes will hit more than 500,000 people, including middle-class professionals, savers who choose to pay lump sums into pensions to benefit from tax relief and self-employed businessmen. Some will face demands to pay tens of thousands of pounds in tax as a result."

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