REVEALED: Five ways Reeves could take a hammer to YOUR pension next month - and what you can do about it

However, economic headwinds since her Autumn budget mean the Chancellor is likely to break her self-imposed fiscal rules, which state that borrowing can not be used to fund day-to-day spending, and that debt must be falling as a percentage of Britain’s GDP.

The Office for Budget Responsibility (OBR) is expected to report that the £9.9 billion fiscal headroom afforded by the Chancellor's self-imposed fiscal rules has now evaporated due to sluggish growth, higher inflation (recently hitting three per cent), and increased government borrowing costs, compounded by commitments to raise defence spending to 2.5 per cent of GDP.

In short, Reeves is likely to borrow more or raise taxes again. With further policy changes expected, Fiona Peake, personal finance expert at Ocean Finance, has outlined five ways pensioners could be negatively affected on March 26.

State pension rises may not keep up with inflation

Peake reckons this Government is "likely" to stick with the triple lock, but if inflation or wages slow down, pension increases might not stretch as far as they have in previous years.

"This means everyday costs could still outpace income growth," she warned.

Indeed, the National Pensioners Convention (NPC) has frequently cautioned that even with the triple lock, the state pension’s value can lag behind inflation.

In 2012, when inflation dropped to 2.2 per cent and the pension rose by the triple lock’s minimum of 2.5 per cent, the NPC warned that this modest increase would not suffice for pensioners facing disproportionate rises in essentials like food and energy, which often outpace the Consumer Prices Index (CPI).

The NPC noted that pensioners, particularly those reliant solely on the state pension, spend a higher proportion of their income on these essentials, making them more vulnerable when inflation accelerates beyond official measures.

Changes to pension credit 

Peake said: "Pension Credit tops up low incomes, but tweaks to eligibility rules or smaller increases could leave some of the most vulnerable pensioners worse off.

"Missing out on this benefit means losing access to extras like free TV licences and council tax reductions."

There is also mounting speculation about how the billions of pounds in welfare cuts announced on Tuesday could impact Pension Credit.

Experts express concerns that efforts to reduce welfare spending might lead to stricter eligibility criteria or reduced benefit levels, potentially affecting vulnerable pensioners.

Tax thresholds staying frozen

With personal allowance and tax bands still on ice, pensioners drawing from private pensions could get "dragged" into paying more tax - especially if their income edges above £12,570, warns personal finance expert.

This is also a reality for millions on state pensions. Currently, no income tax applies to state pension payments, which are due to climb to £11,973 annually for those receiving the full new state pension this April, since this amount remains under the £12,570 tax-free personal allowance.

Earlier projections from the Office for Budget Responsibility (OBR), published with the Budget, had suggested that state pension payments wouldn’t surpass the personal allowance until April 2027.

However, Deutsche Bank forecasts that the full state pension could rise to £12,631 next year, surpassing the personal allowance threshold.

According to the bank's analysis by Deutsche Bank, approximately nine million pensioners will be paying tax on their income from April 2026 due to this change (see graph below).

The more private pension income you have on top of this state pension, the more tax you’ll owe.

Cuts to benefits or energy support 

"Last winter’s energy bill support helped many pensioners get by, but if the Government doesn’t extend help this time, higher bills could become a real struggle," warns Peak.

Reeves' last intervention will not have inspired much confidence, last summer, the eligibility criteria for Winter Fuel Payments was changed, meaning that around 9.2 million older people no longer qualify.

Other benefits like housing or disability support could also face tightening, Peak fears.

These concerns have intensified this week after Chancellor Rachel Reeves earmarked several billion pounds in spending cuts to welfare and other government departments ahead of the Spring Statement.

Savings losing interest 

Peak warned: "If interest rates drop, pensioners relying on savings interest could see their income take a hit. At the same time, higher living costs mean those savings won’t go as far."

As the personal finance expert explains, lower interest rates lead to reduced returns on savings accounts and fixed-income investments, which many pensioners depend on for income.

For instance, the Bank of England recently cut interest rates from 4.75 per cent to 4.5 per cent, marking the lowest base rate since June 2023.

In fact, analysts are sounding the alarm that bank customers are falling into money-losing "traps" when it comes to easy-access savings accounts.

What can I do to protect my savings?

To minimise the impact of Reeves' Spring Statement, Peak recommends the following:

• Check Your Pension Credit Eligibility: "Even if you’ve been turned down before, changes in circumstances could mean you now qualify."
• Make the Most of ISAs: "Keeping savings in a tax-free ISA helps you avoid tax on interest, especially with frozen thresholds."
• Budget for Higher Costs: "Look at where your biggest expenses are and see where savings can be made, whether that’s switching energy deals or cutting non-essentials."
• Delay Pension Withdrawals if Possible: "Leaving your pension pot untouched for longer lets it keep growing tax-free."
• Shop Around for Savings Rates: "If interest rates drop, moving money into the best-paying account can make all the difference."