A Budget move to curb salary sacrifice pension schemes is set to raise between £3billion and £4billion, with businesses warning the plan will push up costs and reduce staff pension contributions.
Chancellor Rachel Reeves is expected to unveil the measure this week, with officials now expecting it to raise more than the previously floated £2billion.
The change would limit how much employees can sacrifice from their salary into pensions without paying national insurance.
Business groups say they will shoulder most of the rise, having already faced higher employer NI contributions.
Pension experts and business leaders warn the move will hit long-term savings. Around 5million basic-rate taxpayers use salary sacrifice, and a low cap could bring many into scope.
The Treasury declined to comment.
FTSE100
The UK's flagship share index, the FTSE 100, was up 49-points at 9,589 shortly after opening this morning.
Brent crude oil futures were up 0.20% at $61.58 a barrel.
Companies reporting:
There are no FTSE 350 companies reporting today.