Pensioners could be whacked by yet more Labour Party blows in the forthcoming October Budget as Rachel Reeves reportedly considers up another tax hike.

Those who have saved could see the tax-free lump sum slashed by up to two-thirds by the Chancellor in her upcoming fiscal statement.

Currently, those who reach the age of 55 are allowed to take up to 25 percent of their pension pot tax-free, up to a maximum of £268,275.

However this evening it’s been reported that Ms Reeves’ officials are now scoping out whether they could slash this to just £100,000.

Such a move, being pushed by left-wing think tanks, could hand Ms Reeves up to £2 billion in additional revenue to spend on Labour policies.

The Telegraph published the revelation after a top pension provider was asked by officials to assess the impact of the policy.

Both the Institute for Fiscal Studies and the Fabian Society have argued that the current cap favours the wealthy, with the former estimating it could harm around one in five retirees.

This evening Ms Reeves has been warned of “major outcry” from pensioners, with Steven Cameron of pension company Aegon blasting: “Many individuals will have planned their retirement finances on the assumption they could take 25 percent of their full fund as a tax-free lump sum.”

Meanwhile, Standard Life’s Mike Ambery warned the policy would be “operationally complicated”.

He explained: “That’s because pension funds are normally written under trust and also you can’t really retrospectively make changes to benefits that people have already built up. It could be subject to a legal challenge.”

A Government spokesman said: “We do not comment on speculation around tax changes outside of fiscal events.”

Earlier this week many pensioners will have breathed a small sigh of relief after it emerged Ms Reeves had dropped plans for a different raid on savings.

The Chancellor had hoped to raise funds by reducing tax relief on those earning just £50,000 a year.

However senior Treasury officials told her that reducing the current 40 percent level of tax relief would hit those in good jobs who had dedicated their lives to the public sector.

In one example, a nurse earning £50,000 would face an additional tax bill of up to £1,000 a year.

A senior Government source told the Times that such a move would be “madness” given the Treasury has spent the months since the General Election going to great efforts to give public sector workers huge pay rises.

There remains furious pressure on the Chancellor to use any headroom to reverse her cruel decision to cut Winter Fuel Payments.

However, Labour is increasingly coming up against brick walls ahead of the Budget, as Treasury officials warn that a number of their main manifesto money-raising pledges will not generate nearly as much cash as they believed.

They include plans to abolish nondom tax status.