Ahead of the chancellor's Autumn Statement on Wednesday, the NAPF is also alarmed by the impact quantitative easing (QE) is having on defined benefit final salary pensions and the businesses running them, and urged the chancellor to do more to help.
In its Autumn Statement submission, the NAPF argued that another reduction in the annual pension tax allowance would discourage people from saving into a pension, at a time when the UK needs to save more for its old age.
The NAPF also argued that pensions tax changes would not only affect wealthy people, but also those on more modest earnings who have been in the same job for many years, including public sector workers.
Joanne Segars, NAPF chief executive, said: "Our pensions tax system has undergone big changes in recent years. This has added significant costs to businesses and pension schemes, and has damaged people's confidence in pensions as a way to save.
"Faced again with another change, both employers and employees risk losing confidence in the system and becoming disengaged with pensions saving.
"If the chancellor goes ahead, it is not just the rich who will be affected, but also middle earners. Moderate earners paying into a final salary pension who have built up many years of service could be hit with significant, one-off tax bills as a result of modest promotions."
Segars added: "The Government must not fiddle with the pensions tax regime again. With auto-enrolment now rolling out, it is key that the Government sticks to its commitment to reinvigorating workplace pensions so that employers can provide good pensions and employees can save for their future."
