Industry calls for major Isa overhaul

He said: “Today's report offers a worthwhile, credible and thought-provoking alternative to the current muddied savings landscape."

According to Rachael Griffin, tax and financial planning expert at Old Mutual Wealth, adults invested £62 billion into Isas and £858 million was heaped into Junior Isas during last tax year.

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She said: “It is important that people don’t lose trust in the successful Isa brand which has been built on simplicity and now holds a substantial part of the UK’s savings.”

However, “navigating the world of Isas has become as complicated as working your way through a maze blindfolded,” she added.

Ms Griffin believes that a simplification of Isas and, in particular, the establishment of an Everything Isa “could mean savers just need to get grips with one set of rules and features”.  

Tom Selby, senior analyst at AJ Bell, is also backing AAT’s recommendations.

He said: “Complexity is the enemy of good savings policy and the government should focus its attention on making the rules governing both pensions and Isa as straightforward as possible.

“We believe there is a strong argument for incorporating the features of all the main Isa products – including Cash, Stocks and Shares, Junior, Innovative Finance, Help-to-Buy and Lifetime - in a single product.

“On the Lifetime Isa, we agree the exit penalty and age restrictions are major drawbacks, but would prefer the government to remove those inhibitors rather than scrapping something which has proven extremely popular with investors.”