The financial advice firm also calculated that pension investors are on course to receive a total of more than £25bn in tax relief during the 2018-19 tax year.

This relief is effectively a refund of the tax you paid on your earnings and means that basic rate taxpayers – who receive 20% relief – only need to pay £80 to invest £100 into their pension pot.

Higher rate taxpayers receive tax relief of 40%, while additional rate taxpayers get 45%.

Sean McCann, chartered financial planner at NFU Mutual, said: “Phillip Hammond described tax relief on pensions as ‘eye wateringly expensive’ and it’s almost certainly going to remain in his sights for some time. We could see some changes announced before the end of 2019.

“The multi-billion-pound surge in cost will partly be due to the roll out of automatic enrolment, where employees are added to workplace pension schemes by default. While pension contributions are typically low, the sheer numbers involved will have made a difference.”

He also highlighted the pension freedoms as a factor behind the increase. These rules were introduced in 2015 and allow individuals who are aged 55 and over to spend or invest their pensions as they wish.

“Savvy savers in their 40s, 50s and beyond are now using pensions as an alternative to a stocks and shares ISA because of the tax breaks. Anyone can access their pension from age 55 and the tax relief on contributions for higher rate taxpayers in particular makes this a very tax efficient option,” McCann added.