The government must unleash growth in the forthcoming Budget or ministers will be forced to hike taxes even higher at future fiscal events, the head of the largest player in the UK pensions market has warned.

Andy Briggs, chief executive of Standard Life, told City AM that the UK's ageing population leaves Chancellor John Healey with one of two options: either "drive economic growth" or face the prospect of a "rising tax bill" in order to meet his spending commitments. An ageing population weighs on the public finances from both directions: it raises spending on health and pensions while shrinking the share of the workforce that generates tax revenue, a long-run pressure that successive governments have identified as one of the biggest fiscal challenges facing the UK.

In just over a month, Healey will deliver his first Budget as Chancellor against a difficult backdrop of rising borrowing costs and a growing debt pile.

Briggs said "a series of measures to really support driving strong economic growth" would be "important" when Healey takes to the despatch box on 28 October.

"The most important thing is driving economic growth… if you drive economic growth and you create more roles, and you scale more businesses, that's what will make the biggest difference across the tax and welfare system as a whole," he added.

On Monday, Healey refused to rule out further tax hikes at the Budget, as he framed growth as the UK's "pathway out of debt".

Speculation has continued to mount that the UK faces another punishing tax raid in October, following ousted Chancellor Rachel Reeves' two Budgets, which raised £40bn and £26bn respectively.

Stop the pensions speculation, Briggs urges

Financial services leaders have been left fretting over numerous potential revenue-raising levies and have urged the government to commit to the 25 per cent tax-free pension lump sum, currently capped at £268,275. Pensions have repeatedly been a target for chancellors seeking revenue because the tax relief attached to them is one of the largest single costs in the tax system, which is why the sector seeks certainty over rules that affect savers over decades.

Last year, the Labour-associated think tank the Fabian Society urged the Treasury to cut the lump sum to £100,000. Pensions minister Torsten Bell has previously advocated cutting the limit to just £40,000.

"When it comes to the topic of pensions, we want to avoid lots of speculation in every budget cycle," Briggs said.

"That speculation undermines consumer confidence that if they're saving for the long term, the goalposts won't move along the way."

He urged the government to make pensions a "long-term game with rules and approaches set over multiple decades, not speculated on in each annual Budget cycle".

Briggs said wider policy should be shaped by targeted support and allocating more to private assets. Standard Life, which forms part of FTSE 100-listed Phoenix Group, is one of the UK's largest workplace pension providers, giving its interventions in the policy debate particular weight across the retirement savings market.

The pensions chief has previously warned that nearly 15m Britons were set to suffer in retirement as a result of workers treating their automatic eight per cent auto-enrolment pension contribution as a ceiling rather than a foundation on which to build.

He called for "radical change and meaningful action" in the forthcoming Pension Commission, which is set to publish its legislative roadmap for the sector for decades to come.

Standard Life's half-year results

Briggs' comments followed Standard Life's half-year updates, in which it swung to a loss after markets moved against positions the firm had taken to shield itself against volatility.

The FTSE 100 pensions giant posted an overall loss of £179m for the first six months of the year, driven by £473m in paper losses on financial protection contracts bought to safeguard the business against market falls.

Because stock markets rose, the value of those protective policies fell, and strict accounting rules forced the group to record the drop on its books. The strategy, known as hedging, is used by businesses to protect their balance sheets against sudden market drops and ensure steady cash flow.

"The group accepts the hedge-related volatility," Standard Life said in its half-year update, adding it was a "known consequence of our hedging strategy that is designed to protect our cash, capital and dividend."

Despite the headline drop, the FTSE 100 group recorded a 25 per cent increase in adjusted profit to £563m. This came as operating cash generation – the total amount it brings in from day-to-day core operations – jumped six per cent to £745m. The firm said this put it on track for mid-single-digit annual growth. The gap between the headline loss and the underlying profit growth illustrates how hedging-related accounting effects can distort reported results without necessarily reflecting the underlying health of the business – a dynamic investors in insurers and pension providers routinely have to weigh when reading half-year numbers.