Hard-pressed families would be £1.5 billion better off had Gordon Brown simply raised the Isa allowance in line with the cost of living.

The figure emerged as consumer and business groups called for sweeping tax cuts for workers and families to help ease the pain of recession, with the Bank of England expecting the economy to contract by up to 2% next year.

Alistair Darling, the chancellor, is set to unveil modest tax cuts in his annual pre-budget report on November 24 after last week’s proposal by the Conservatives to give a £2,500 National Insurance holiday to employers who hire workers who have been jobless for three months or more.

The government has admitted, though, that any cuts would have to be followed by tax rises in the medium term as it tries to get the public finances back on track.

However, a panel of tax experts surveyed by The Sunday Times said several relatively inexpensive measures could reward saving and boost incomes, including raising personal allowances and reducing property and inheritance tax.

The government has already suggested it will postpone changes to car tax for a year.

We offer our wish list.

1 RAISE ISA ALLOWANCE

Isa savers are losing £165m a year in tax relief because the tax-free allowance of £7,200 (split between cash and shares) has not risen in line with inflation.

If it had, it would now be £9,254, according to Fidelity, allowing taxpayers to shelter an extra £2,054 each a year — worth £500 in tax relief, or an extra £1.5 billion to all 3.3m Isa savers over the past nine years.

The Isa allowance has failed to rise in line with inflation since the accounts were introduced 10 years ago.

Mike Warburton of Grant Thornton, the accountant, thinks the chancellor should go further and lift the Isa limit to at least £10,000. He has also called for a one-year tax-break on all cash-deposit balances up to £250,000 to “encourage a rebuilding of the savings ratio from its current dismal lows in view of very low interest rates”.