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The government was wrong to introduce significant changes on the taxations of pensions contributions, according to a Lords report.
A review of the Finance Bill by the Lords economic affairs committee found that changes to the tax relief system risk damaging pensions savings.
In the report published on Tuesday, the committee concluded that the changes to tax relief on pensions are unnecessary so soon after a major redesign of the system in 2006.
"While the numbers directly affected may be relatively small, among them will be individuals who are influential in determining the pensions policy of many companies," the report stated.
"The precedent may be seen as the thin end of the wedge in reducing relief more generally, so risking a reduction in pensions savings."
The committee also questioned whether measures should have been introduced in the Budget to limit pension contributions.
Alternative solutions need to be found for those who are self-employed, retiring or being made redundant, said the report.
Should alternative solutions be unavailable the special annual allowance should be increased from £20,000 significantly, the committee recommended.
Chairman of the committee Lord Vallance of Tummel expressed concern that the government had "underestimated the risk" in changing long-standing rules that relief for pensions contributions should be given at an individual's marginal rate.
Dods Parliamentary Communications Ltd