'All options open' amid rumours Government plans to make pensions like Isas

The Treasury insists it is still "considering all options" following speculation that radical plans to make pensions more like Isas are set to be unveiled.

There have been reports that Chancellor George Osborne could unveil plans to make pensions more like Isas in the Budget on March 16.

The idea was mooted in 2015 and a consultation into pensions tax relief was launched last summer - but pension experts warned that if such a move happened it could lead to a Northern Rock-style run on the pension system and mass withdrawals.

It could reverse the way that pension pots are taxed. At present, people are taxed on the cash they take out of their pension pot but not when they put the money in.

An Isa-style system could remove the up-front tax relief, but allow withdrawals to be made tax-free instead.

But doing so could mean people feel less inclined to keep their money in their pot, experts have warned.

Tom McPhail, head of retirement policy at Hargreaves Lansdown, said: "An Isa-style reform with tax relief being scrapped in favour of tax-free withdrawals would create the risk of a future Northern Rock-style run on the pension system and the UK stock market.

"Any hint of political interference in the future could result in billions of pounds being withdrawn overnight; it would be hugely unstable."

But a Treasury spokesman said all options are still being considered - including retaining the current system.

He said: "The Government launched a wide-ranging consultation into pensions tax relief last summer.

"We have not decided on whether or how to reform the system and are considering all options, including retaining the current system. This consultation is now closed and we will respond at the Budget."

The pension system has already undergone a huge series of shake-ups in recent years, with the introduction of automatic enrolment into workplace pensions in 2012 and the pension freedoms launched in 2015 which allow people aged 55 and over to take their savings pots how they wish, rather than being required to by an annuity retirement income.