Recent research from the building society found that 70 per cent of the UK’s population are still failing to make full use of the tax incentivised ISA system, which is why Nationwide is calling for reform.

Changes that Nationwide proposes to the ISA system include increasing the maximum ISA subscription limit from £7,200 to £8,735 to combat inflation since the ISA was launched 10 years ago, allowing savers to withdraw and replenish their ISA allowance during each tax year, and increasing the cash ISA limit to match the stocks and shares ISA limit.

Commenting, Graham Beale, Nationwide’s chief executive, said: “We would like to see changes implemented that make it easier and more worthwhile for consumers to make full use of their tax-free savings allowance.

“Increasing the ISA subscription limit to counter the effect of inflation over the past ten years would provide an added incentive for consumers to save, while increasing the flexibility of ISAs would offer greater support to those consumers who need to dip into their savings or those who are currently struggling to save their full allowance.”

Meanwhile, Nationwide also recognises that first time buyers need a helping hand, and is consequently proposing a review of stamp duty. Reforms proposed include an increase in the nil rate threshold to £250,000, with a flat rate of one per cent applied above this limit, and a fundamental review of stamp duty over the next 12 months.

Mr Beale added: “We believe increasing the threshold to £250,000, and linking it to inflation going forward, will stimulate the housing market and help reduce the burden that stamp duty places on first time buyers in particular.

“The time is now right for reform, as the current low level of housing market transactions means such changes would have a lesser impact on tax revenues than at the height of the market.”

Reports today suggest that the housing market will also receive a £1billion boost, as Darling is expected to announce help for the construction industry tomorrow.

© Fair Investment Company Ltd