The raid on our pension funds in his very first Budget revealed a Chancellor who is not a fan of transparent taxation. If taxpayers understand what’s going on without the aid of a calculator and several cold towels, they are more likely to take umbrage at being shortchanged.

Officials cautioned the Chancellor that everyone in a money purchase scheme would suffer from his pensions raid. Money purchase schemes are plans which pay a pension based entirely on the amount of money you put in, and the performance of the stockmarket. If you have a personal pension, or a stakeholder, you are in a money purchase plan.

The key to success in saving in a money purchase scheme is how much money you make from your investments. Once Mr Brown scrapped the tax relief on dividends, everyone in a money purchase plan lost out. The key question is: by how much?

The answer, luckily for Mr Brown, is that it depends on how much you put into your pension and where it is invested. A young saver with a fund holding income-generating shares will lose out more, cumulatively, than an older saver with more money tied up in cash and bonds.

The other type of pension is a final salary scheme. Offered primarily by big companies, these promise a salary based on the number of years you have worked and the amount you are paid at the time you retire. As officials predicted, the effect on these would be more complex, but potentially no less devastating.

Employers were faced with the double whammy of a loss of a valuable tax relief and stock markets that collapsed spectacularly in 2000. Experts believe that the loss of the tax relief forced companies to put an extra 0.5 per cent of their employees’ total wage bill into the pension. This, combined with increasing life expectancy and crashing markets, meant final salary schemes suddenly became ruinously expensive.

The result has been catastrophic. Generous final salary schemes, once the envy of Europe, have closed down. Just one third of these pensions are now open to new members.

But it is difficult to pin down exactly how the tax changes have affected individual members of final salary schemes. Imagine if Mr Brown raised £5 billion a year from increasing income tax. The outcry would be immediate and vociferous. Instead, the Chancellor went for a softer target: our pensions. Why did he ignore all his official advice that the tax raid would be devastating? Perhaps it was because he thought that pensions are perceived as being so complicated and so dull that we simply would not notice his biggest stealth tax.

The real losers are young savers. Already burdened by student debt and priced out of an overheated housing market, twentysomethings face a difficult route to retirement. By 2050, the proportion of British people over the age of 65 will increase from 28 per cent today to 48 per cent. This will leave Britain with dwindling numbers of taxpayers to support a massive retired population. As our twentysomethings reach retirement, they are likely to have minimal state pension help and, if current trends continue, pitiful private pensions.

Mr Brown has raided £100 billion from the nation’s private retirement funds, despite the timebomb lurking in our state pensions. But he will have enjoyed his index-linked MP’s pension for years before the full consequences fall on the shoulders on some unfortunate future chancellor.

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