Despite this the IFS found borrowing had now returned to pre-crisis levels and the deficit was at 1.9 per cent of national income in 2017/18, putting it at its smallest since 2001/02.
Tom Selby, senior analyst at AJ Bell, said the decision to allow undrawn pensions to be passed on tax-free when the holder dies before 75 was a pre-election gambit by previous Chancellor George Osborne.
He said: "It would be no surprise if Phillip Hammond, who has not been shy of departing from his predecessor’s policies, is now revisiting this decision as he looks at ways to raise extra cash.
"This would potentially present a real problem for savers who have made decisions based on the existing tax treatment of defined contribution pensions on death.
"Many defined benefit members will have chosen to give up their guaranteed benefits because they want to prioritise passing on unused funds to loved ones. If the Government pulled the rug from under the feet of savers’ by hitting their pots with extra tax and inheritance charges they would understandably be very angry.
"While the temptation to levy national insurance contributions on the earnings and retirement incomes of older people will be strong for the Treasury, there will undoubtedly be many within government concerned at the electoral impact of such a move."
In July this year, MPs argued that pensions tax relief was not an effective way of incentivising people to save into pensions and called for a flat rate of relief.
However in its response to MPs, the government refused to move to a single rate of pension tax relief due to a lack of agreement that more reform is needed.
Billy Burrows, financial adviser at Better Retirement, said: "On the one hand the government wants people to take responsibility to save for a pension on the other hand they are talking about cutting back on tax relief for high earners.
"While it might seem appealing to cut the tax incentives for fat cats, it sends out the wrong signals and will impact many people who do not think of themselves as wealthy."
Similarly, Carl Wilkinson, financial planner at Informed Choice, said: "Any legislation that restricts tax breaks on pension savings is going to dissuade some people from using pensions as a long term savings vehicle.
"Higher earners are already restricted in their pension savings capacity by the tapered annual allowance and lifetime allowance, further restrictions may then cause people to look for alternatives to reduce tax, such as enterprise investment schemes or venture capital trusts, which come with a higher level of risk and won’t be suitable for everyone."
rosie.quigley@ft.com
