Reid says many firms give employees an uplift in benefits if they are made redundant, which often takes the form of an extra pension contribution.
Under the anti-forestalling measures, annual contributions are capped at £20,000, although savers who have been making quarterly or more frequent contributions above that can continue. Reid says the additional contribution could tip many people over the anti-forestalling limit, resulting in a 20 per cent tax charge. He is calling on the Government to amend the legislation to exempt people in this situation who are set to take immediate benefits. He has also asked the Conservatives to table an amendment on the matter.