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Rachel Reeves has been warned not to “hammer” pensioners by extending a freeze on tax thresholds following her u-turn on plans to raise income tax. The Chancellor ditched her long-floated plan to raise the main rate of income tax last week in an astonishing reversal, sending the markets into turmoil.

However the move has left campaign group Silver Voices fearing that she will still pick the pockets of pensioners in order to fill her £20 billion fiscal black hole. It’s now thought Ms Reeves will raise billions by freezing income tax thresholds for a further two years, which when paired with the Triple Lock would see almost all recipients of the basic state pension paying income tax by the next election. The Chancellor is also believed to be considering lowering the income tax threshold, further endangering the household finances of older Britons.

Warning that freezing the thresholds would be a “clear breach” of Labour’s manifesto tax pledges, Silver Voices’ director Dennis Reed warned that Ms Reeves must “wake up and smell the coffee”.

He told the Express: “We now fear an extension of the freeze on lower tax thresholds or even a reduction in personal allowances. Both measures would be clear breaches of the Manifesto pledge and would squeeze living standards of older people on low and modest incomes intolerably.

“We urge the Chancellor to wake up and smell the coffee, the public do not want you to hammer their grandparents.”

An online petition demanding that tax thresholds be raised to prevent pensions being eligible for income tax has now hit 175,000 signatures with two weeks to to go until Ms Reeves’ second Budget.

An HM Treasury spokesperson said: “We do not comment on speculation around changes to tax outside of fiscal events.”

Silver Voices did welcome Ms Reeves abandoning her plans to breach Labour’s manifesto by raising income tax by 2p, while cutting National Insurance by 2p.

The policy would have left working-age people no worse off, but would have shifted the burden onto pensioners who don’t pay income tax but do pay National Insurance.

Mr Reed previously warned: “Trust is at an all-time low after the winter fuel fiasco, kicking social care reform into the long grass and the betrayal of the 1950s women.

“Not one senior figure in the Government has made a speech, since taking power, recognising the struggle older people on low and modest incomes are having with the cost of living. It is always about “working families” and to hell with the rest of you.”