Punitive pension tax rules have scared savers into making poor and financially damaging decisions.

Those falling foul of the “lifetime allowance”, which caps the amount people can save into their pensions tax free, can be stung by tax charges of up to 55pc. However, 400,000 more savers will have to grapple with the complex rules since Rishi Sunak, the Chancellor, froze the threshold at £1,073,100 for five years. This newspaper is campaigning to reverse the freeze.

Kate Smith, of pension group Aegon and Telegraph Money’s pensions doctor columnist, said the threat of high taxes had in some cases changed savers’ behaviours for the wrong reasons.

“There is a risk that people make irrational decisions when faced with the lifetime allowance and it’s very worrying,” she said. Pension rules have long been subject to reforms and life-changing decisions should not be made when there are moving goalposts, she added.

Someone who stopped saving into their pension because they did not want to breach the lifetime allowance could lose thousands of pounds if they are still far away from retirement and the threshold is later increased or removed altogether, Ms Smith said.

Those who opt out of their pension to pay money into other tax-efficient savings accounts, such as Isas, would lose their employer contributions and tax relief on the money.