An extra one million low-income pensioners are set to be hit by Labour’s “retirement tax” by 2030, analysis suggests.

Rachel Reeves is expected to extend the income tax threshold freeze from 2028 to 2030 in the Budget next week.

The move would drag at least one million pensioners who do not currently pay tax into the 20pc basic rate tax band, according to wealth manager Quilter.

Quilter also estimated that the stealth tax raid would push between one million and 1.5 million pensioners who already pay income tax into a higher tax bracket by 2030.

Some 8.5 million pensioners already pay income tax, according to HMRC figures.

Under the Tories, income tax thresholds were frozen until 2027-28. This helped to push an extra 2.5 million pensioners into the tax net during the party’s 14 years in power.

Extending the freeze will push millions more into higher bands as their incomes rise with inflation. It would leave Labour open to the accusation that it has broken a manifesto promise not to increase income tax, VAT or National Insurance. The measure is expected to raise around £7bn a year.

Income is taxed at 20pc above £12,570, 40pc above £50,271, and 45pc above £125,140.

These thresholds are meant to rise in line with inflation so that a worker’s income does not fall in real terms. Freezing them means the Government gets to keep a larger share of rising incomes.

The Conservatives repeatedly warned during the general election campaign that Labour would hit pensioners with a “retirement tax” if the party came to power.

The triple lock ensures that the state pension rises each year by the highest of inflation, average earnings or 2.5pc. The new full state pension is already due to hit £11,975 in April, after a 4.1pc boost in line with wage growth.

It means only a modest amount of additional income is already pushing low-income pensioners past the frozen £12,570 tax-free threshold.

Pensioners who rely solely on the state pension are expected to pay tax on their income by 2027, according to a separate analysis by Deloitte.

Jon Greer, head of retirement policy at Quilter, said low-income pensioners risked being “ensnared in a stealth tax trap” if the Chancellor chose to extend the freeze.

He added: “Thresholds that are meant to shield lower earners are stealthily morphing into a tax burden for those on the lowest incomes.

“This rumoured extension would mean that, by 2030, over one million pensioners could see their hard-earned savings chipped away with unexpected tax bills, making it increasingly difficult for them to manage their finances at a time when every penny counts.

“It highlights just how damaging this freeze could be if it continues beyond its current timeline.”

A Treasury spokesman said: “We do not comment on speculation around tax changes outside of fiscal events.”