Was this the worst budget I have seen in a working lifetime reporting on these fiscal pantomimes? The reason I ask is that it will hit low-paid and young people hardest of all with stealth taxes that sacrifice small savers’ long-term retirement dreams to solve big government’s short-term cash crunch nightmare.

Lest this sound like a party political point, I had better say straight away that Rachel Reeves’s latest effort is up against stiff competition after several damaging budgets in the last 40 years. I remember the dire consequences for homebuyers from the Conservative chancellor Nigel Lawson’s 1988 budget, which was popular on the day. Also, the Labour chancellor Gordon Brown’s concealed tax raid in 1997 helped turn company pension surpluses into deficits, although few people understood that at the time.

The less that is said about Kwasi Kwarteng’s brief tenure at Number 11 Downing Street between early September and mid-October 2022, the better.

Here and now, you could be forgiven for failing to recognise the significance of Reeves’s restrictions on salary sacrifice — an agreement to give up some pay today, and avoiding tax on it in the process, to boost retirement income tomorrow. In total more than £4 billion of tax is avoided in this way each year. Whether we know it or not, this will hit private sector pensions, leaving public sector schemes subsidised by taxpayers largely untouched.

Hidden behind complex jargon, the simple fact is this budget will extend pensions apartheid —separate systems for government employees and the rest of us — to an extent never contemplated by Brown. Few of the MPs cheering on Reeves will be affected because defined benefit public sector pensions rarely offer salary sacrifice, unlike the defined contribution private sector schemes used by most of their constituents.

There’s no need to take my word for this. Steve Hitchiner from the Society of Pensions Professionals, a trade body, told me: “Restricting salary sacrifice will affect millions of employees — especially basic-rate taxpayers — and is a tax on working people, in spirit if not in name. Perhaps most importantly, it will reduce pension saving.”

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Before your eyes glaze over, consider calculations by the pension company Scottish Widows that show a 26-year-old earning the average full-time salary of £37,430 a year will retire with a pension pot worth £32,000 less because of Reeves’s tax raid. This is because the amount that can be paid in via salary sacrifice while avoiding national insurance contributions will be capped at £2,000 from April 2029.

Scottish Widows assumed they pay in the auto-enrolment minimum of 5 per cent (plus 3 per cent from their employer) and get modest pay rises and investment growth over their working life.

Parents earning £60,000 a year or more, the point at which child benefit starts to be clawed back, and anyone earning more than £100,000, where the tax-free personal allowance begins to be withdrawn, are among other collateral casualties.

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The Institute of Chartered Accountants in England and Wales said about a third of private sector workers use salary sacrifice, including parents and high earners who do so to reduce their taxable income below these thresholds.

Adelle Greenwood from the trade body said: “These employees will need to consider how the changes impact on their wider tax and national insurance position. Also, basic-rate taxpayers may question the fairness of the measure as they face national insurance at 8 per cent, compared with 2 per cent for higher paid employees.”

Hitchiner said: “This will also affect thousands of employers given employer national insurance is charged at 15 per cent on all earnings above £5,000 a year. About 90 per cent of employers offer salary sacrifice.”

Employees’ national insurance contributions are income tax by another name and employers’ contributions are a tax on jobs. The system is designed to be complex because, if it was less confusing, more people might realise how deep the government has its arm in our pockets.

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This nominal distinction between income tax and national insurance is a political pretence all the big parties support. No wonder cynics say the art of taxation is to extract the maximum number of feathers from the goose with the minimum of hissing.

Greenwood added: “The changes to salary sacrifice may require changes to employment contracts, using up resources that could be better spent growing the economy. At a time when an official commission is considering the adequacy of pension saving, this demonstrates a lack of joined-up thinking from the government.”

But it also suggests they are keen to avoid upsetting their supporters. Mike Ambery from the pensions firm Standard Life pointed out: “This change will disproportionately affect private sector workers, as public sector schemes don’t usually use salary sacrifice.

“At a time when simplicity and engagement are critical to improving savings, adding complexity and reducing incentives risks undermining confidence.”

The longer we have to go before retirement, the bigger the effect of these changes is likely to be. Unfortunately, young people are least likely to pay any attention to taxes that will hit them in old age.

Amanda Blanc, the chief executive of the insurer, Aviva, said: “The government has acknowledged that tomorrow’s pensioners are in danger of being poorer than today’s. Research from the Association of British Insurers suggests two in five people will save less if these changes are introduced.

“Savers need long-term stability to trust that they can plan for their future. Short-term actions risk undermining this. We recognise difficult decisions facing the chancellor but urge the prioritisation of savers’ long-term financial security.”

Sad to say, the history of budgets suggests there is fat chance of that. Chancellors focus on tomorrow’s headlines, not borrowers and savers’ best interests years or decades hence.

When Lawson gave five months’ notice in March 1988 that he intended to scrap double mortgage interest relief for couples, few — if any — foresaw the subsequent dash to buy property before mortgage rates soared and house prices plunged. By the early 1990s lenders were repossessing nearly 1,500 homes a week. The dispossessed included friends of mine, who posted the keys back and fled the country never to return as permanent residents.

Now here we are again, with young folk leaving Britain because high taxes, house prices and childcare costs mean hard work no longer means growing wealthy. These unhappy expats — and other young strivers — even have an acronym: Henry. As in High Earner Not Rich Yet.

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Another budget that had a painful sting in its tail was Brown’s first effort in July 1997, which included a brief reference to the reform of advance corporation tax (ACT). Nobody expected that to herald the collapse of many company pension schemes.

But the accountants PwC pointed out: “Few people would understand the effects of technical changes to ACT and tax credits on dividends, even though depriving pensions of them would eventually reduce the income of almost every pensioner from retirement to the grave.

“This was a clever budget which managed to raise billions of pounds in extra taxes yet leave most members of the public feeling relatively unaffected.”

Now, as then, little has changed. The government believes it needs our money more than we do.

Fortunately, the changes announced on Wednesday are not due to take effect until April 2029, so there are three full tax years left to make the most of the present rules.

Whether Reeves’s 2025 budget will really be the worst in my working lifetime, it is too soon to say.