Scrapping top tax relief will wreck pensions, George Osborne told The Liberal Democrats have argued that the 40 per cent relief should be reduced to 20p for the better-off, in line with the basic rate of income tax. Danny Alexander, the Liberal Democrat Cabinet minister, told The Daily Telegraph last month that removing higher-rate tax relief would save the Exchequer more than £7 billion and make the system fairer. In a submission to the Treasury, which was sent last week, the NAPF said: "By restricting higher rate relief or further limiting the amount that individuals can save into a pension, the Government would be fundamentally damaging pension provision. It would be a course of action that would cause future generations of employers and individuals to disengage with pension saving. The NAPF, which represents 1,200 pension funds with assets of £800 billion, added that the Government "needs to stop tinkering with the system and provide stability so people can plan and save with confidence." Figures from the Office for National Statistics last month showed that saving into a workplace pension is at an all-time low among private sector employees. A separate report this week found that the public's trust in the pensions system has also hit record lows. In its submission to the Treasury, the NAPF said: "The UK used to have a pension system that was the envy of the world. However, excessive regulation, fluctuations in recent stock market performance, improvements in longevity and changes in accounting standards have all contributed to a decline in defined benefit pensions. Unless the Government demonstrates that it is serious about its commitment to reinvigorate occupational pensions, there is a risk that trust and confidence in the UK pensions system will be damaged beyond repair. A Treasury spokesman declined to comment ahead of the Budget.