As the Budget looms later today, there are calls for Chancellor Phillip Hammond to scrap planned pension changes and to adjust inheritance tax rules.

The Chancellor is set to deliver his first full Budget tomorrow in the Commons at 12.30 pm since taking the role last year.

Rachael Griffin, tax and Financial Planning expert at Old Mutual Wealth, said: “My chief ask is to amend the IHT allowances. There is a good case for the £3,000 limit to be increased after 35 years of stasis. The allowance on gifts has not been increased since 1981. That means it would be worth over £10,000 had it tracked inflation.”

OMW colleague Jon Greer, a pensions expert, said: “Alterations to inheritance tax rules that are inconsistent with pension freedoms are long overdue. Under the current rules, if a pension transfer is made while someone is in ill-health then there is a risk that HMRC will challenge the IHT-free status of the death benefits if the person passes away within two years of the transfer.”

Accredited Financial Planning firm Mazars IHT said if the Chancellor is looking for an eye-catching initiative, he might look to refocus some IHT reliefs to benefit only owners who are actively involved in the businesses.

The firm said: “This would be easy to present as a counter-abuse measure stopping people investing in unquoted (including AIM) trading company shares and agricultural/forestry property as part of IHT planning. Longer qualifying ownership periods are also a possibility.”

Sara Wilson, head of platform proposition at Alliance Trust Savings, wants to see the Money Purchase Annual Allowance reduction from £10,000 to £4,000, announced in the Autumn, scrapped.

She said it, “could limit the ability of those still in work and – for good reason - drawing down pension funds (for example to manage a gradual wind down to full retirement) to rebuild their pots in the longer term”.

She predicted there could be further pension change if the Chancellor “finally succumbs to long-standing pressure from the pensions industry” by axing the £1m lifetime allowance.

She said: “If the LTA is removed, it could herald a shake-up of tax relief on contributions. The current system of paying tax relief to savers at their highest marginal rate means those on high salaries benefit far more from the Government top up than those on low salaries. Higher rate taxpayers remain at greatest risk of losing out, so for them now may be a good time to think about maximising pension contributions while higher rate tax relief is still available.”

• Financial Planning Today will be running live Twiter and Live Blog from 12 noon, reporting on what Mr Hammond's Budget will mean for Financial Planners, Paraplanners, IFAs and Wealth Managers. Join us from noon.

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