It was estimated that the 25p flat rate would raise £4 billion a year for the exchequer

Treasury officials are investigating plans to introduce a flat rate for pensions tax relief in a move that would penalise well-off savers but reward those on lower incomes, while raising about £4 billion a year for the NHS.

The proposals, which are in the early stages of investigation, would help the chancellor raise money for the health service and other overstretched areas of public spending such as social care, without breaching his fiscal rules.

It is one of a number of options under review since the prime minister gave Philip Hammond a free rein to find ways of funding the government’s £20 billion pledge for the NHS last month.

Theresa May has said “taxpayers will contribute a bit more in a fair and balanced way”