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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”.

Allowance now: £7,200

What it should be: £10,000

2 INCREASE PENSIONERS’ ALLOWANCE

Workers nearing retirement have seen sharp falls in their pensions’ value this year as stock-market turmoil has hit investments.

People over 65 already benefit from a higher personal allowance of £9,030, compared with £6,035 for under-65s, with a commitment to increase it to £10,000 in the next three years. However, experts are concerned that increasing the allowance will give the government more to claw back.

Under the clawback system, the higher allowance is reduced by £1 for every £2 of income above £21,800 — in effect a marginal rate of 30% instead of 20%. For example, those earning up to £21,800 are entitled to the full £9,030. However, someone earning £25,000 would be entitled to just £7,430 (the allowance is reduced by £1,600 for income of £3,200 above the £21,800 threshold, or £1 for every £2).

The age-related allowance reduces back to £6,035 when income reaches £27,790 for someone aged 65 to 74.

The over-75s are entitled to a fractionally higher allowance of £9,180, but this is clawed back in the same way and disappears altogether at £28,090.

Increasing the level at which clawback begins to more than £40,000 would benefit taxpayers over 65 by £600 a year.

John Whiting of Price Waterhouse Coopers said: “This is the government giving with one hand and taking away with another.”

Allowance now: £9,030 (reduced above £21,800)

What it should be: reduced above £40,000

3 BRING BACK MORTGAGE RELIEF

House prices have fallen by more than 12% since their 2007 peak. The chancellor could stimulate the market by bringing back mortgage-interest tax relief. This relief, before it was abolished by the Labour government, allowed basic-rate relief on mortgages up to £30,000. Relief was cut to 10% before being scrapped in the 1990s, causing the property boom and bust.

Ronnie Ludwig of accountants Saffery Champness said: “Reintroducing mortgage-interest relief would be radical. The government could limit it to first-time buyers to ensure it is properly targeted.”

This year the government raised the stamp-duty threshold to £175,000 from £125,000, but it failed to boost demand.

Warburton said: “The government could scrap the ‘slab’ system, whereby an extra £1 in the price above £250,000 costs an extra 2% in stamp duty on the entire amount.”

Relief now: none

What it should be: 20% relief for first-time buyers

4 CUT DEATH DUTIES

Last year inheritance tax (IHT) thresholds were overhauled, allowing couples to transfer their allowance to each other when they die, and the threshold was raised to £325,000 for 2009, up from £312,000.

The government has been criticised for not raising the limit in line with inflation. That would take next year’s threshold to £328,000.

There are also calls for more generous IHT relief where the value of assets such as shares and property is down. Taxpayers can apply for a recalculation of the IHT liability — although only if shares and property are sold within 12 months of the date of death.

Allowance now: £312,000 (£624,000 for couples)

What it should be: £500,000 (£1m for couples)

5 BOOST REDUNDANCY PAYOUTS

The government could also soften the blow of the recession by raising the £30,000 tax-free limit for ex-gratia payments. According to the Office for National Statistics, the jobless number rose at the fastest rate in 17 years to 1.79m in the three months to the end of August.

Angela Beech of Blick Rothenberg, the accountant, said: “Increasing the tax-free limit when many taxpayers are losing their jobs would send the right signal and potentially minimise the damage from expected job losses.”

The chancellor should increase the tax-free limit on redundancy payouts to £50,000.

“This would help those who had been in their job for a while, but would not appear to target the super-rich,” she said.

Allowance now: £30,000 tax free

What it should be: £50,000 tax free

6 CUT TAX ON SPENDING

Reducing the Vat burden would help hard-pressed businesses, and could reduce prices for consumers.

The Centre for Economics and Business Research (CEBR) last week called for a temporary cut in Vat from 17.5% to 12.5%. This would cost £24 billion, but the CEBR said it would stimulate consumer spending and ultimately pay for itself.

Alternatively, accountants said the chancellor could extend the scope of the reduced 5% rate to include repairs and maintenance on domestic property and restaurant and catering supplies.

Rate now: 17.5%

What it should be: 12.5% for two years