From April, changes in the tax treatment of savings mean that an individual will potentially be able to earn up to £27,900 tax-free.

This includes £1,000 of interest under the new Personal Savings Allowance, £5,000 of dividend income, £11,100 of capital gains and a £10,800 personal allowance.

While this will take millions of people out of the savings tax net altogether, pensions remain the most tax-efficient major form of savings, even in comparison to ISAs and buy-to-let property, according to research by the Institute for Fiscal Studies (IFS).

It said that pensions auto-enrolment – where employers match employee contributions – is “much more attractive than almost any other option”.

For a basic-rate taxpayer, an employer contribution to a pension with a net cost of £70 is worth the same as a £100 contribution to an ISA, the report said.

However, the research also found that the incentive to save will vary depending on personal circumstances.

Stuart Adam, one of the report’s authors said: “The last few years have seen radical changes announced to the taxation of savings. These will take millions of people’s savings out of the tax net altogether. Ideally people might make savings decisions based on the underlying risks and returns of different assets. But taxes and charges can significantly change the relative attractiveness of different savings options. If people are unsure about how taxes and charges might change, their decisions become even harder.”