‘Devil’ tax raid forcing pensioners to squander their hard-earned savings

The chancellor’s decision was “unfortunate”, he added, as he wanted to leave “the maximum possible” to his nieces.

Now he is studying by giving them your pension pot, but he also decided to use more of his retirement wealth to have fun while he could.

“I’m going to spend more. What’s the point of leaving this to the tax authorities? I’m going to use it to enjoy life and travel. But I also need to make sure I have enough resources for primary care.”

Mr Harrington, who still works as a chartered accountant, is now considering whether to retire in Portugal or even Mauritius.

“You need to get the most out of life, especially if you’ve been careful for years.

“Throughout my working life I have made choices not to go on holiday or buy the car I wanted – and now I wonder why.”

Sir Steve Webb was pensions minister in 2014 when George Osborne announced “pension freedoms” which gave pensioners unprecedented control over how to use their savings.

At the time he said the government was not particularly concerned if pensioners “get a Lamborghini and end up with a state pension” as it is “their choice”.

Ian Cook from management company Quilter believes that Labour’s inheritance tax raid means that Sir Steve’s humorous example has now become a serious reality.

He said: “If anything will push people to buy a Lamborghini, it will be this. What’s to stop someone paying £1,000 or £2,000 a month to buy a car? It’s not funny anymore.”

He added that around 100 of his 120 clients would be affected by inheritance tax and pensions and that he would advise them to change their behaviour.