More needs to done to encourage Brits to save more in the economic downturn, insurers demanded today.
The Association of British Insurers (ABI) is calling on the chancellor Alistair Darling to increase total ISA limits to £9,600 a year from the current £7,200.
But to push people into greater investing, the ABI is proposing the cash element of the ISA remain at £3,600, and the stock and shares element lifted to £6,000.
The ABI reports building society savings have only exceeded returns on equities twice since 1970 over ten-year investment periods.
The ABI is also calling for more action to encourage people to save for long-term care, with the average cost of nursing care now over £33,000 a year.
With the average household unsecured debt at £21,000, the government is called on to promote 'financial health' through publicity campaigns encouraging consumers to save rather than rely on debt.
"Over the last decade many have relied on the belief that owning property would provide for almost all their long-term needs. Consumers have also increasingly relied on credit which will no longer be as readily available," the report states.
"Current market conditions are exposing the limitations of property and debt. But a reversal of the trends is hard to achieve. Consumers have lost the savings habit."
Stephen Haddrill, ABI director general, said: "The pre-Budget report in the autumn is building up to be one of the most crucial in modern times.
"As parliament rises we hope this report will contribute to the work that will go on over the summer."
The ABI report also calls for greater consultation on tax changes matching pledges from the Conservative party.
The Treasury has highlighted its current work on promoting savings through its Savings Gateway scheme, which provides a financial incentive to save for those on limited income through the government matching pound for pound money which people save.
Questions have also been raised on how much savings would be encouraged by raising the ISA limit to £9,600, as only a minority of people would be able to save such an amount.