The government contribution would be up to an annual allowance and would be paid irrespective of savers’ taxpaying status, according to Johnson’s report Incentivising retirement saving: the end of tax relief, and a new beginning, which was published on Monday.

The report argues the 25 per cent tax-free lump sum should be scrapped – with accrued rights protected – and also calls for an end to the lifetime allowance (LTA), which it argues “adds considerably complexity to the pensions landscape”.

Another of Johnson’s proposals is that ISA and pension products should share an annual combined contribution limit of £30,000, replacing the current ISA and pensions tax-advantaged allowances.

The CPS report comes days after pensions minister Steve Webb called for an overhaul of tax relief on pension contributions with a flat 30 per cent rate introduced and the LTA axed.

The CPS report claims Johnson’s radical proposals are in keeping with the spirit of last month’s Budget, at which Chancellor George Osborne announced a package of measures that give retirees unprecedented access to their savings.

But commentators have suggested the CPS report is “overly intricate”.

“We don’t think this is a good moment to start attacking the tax free lump sum entitlement,” said Hargreaves Lansdown head of pensions research Tom McPhail.

“By contrast, the pensions minister’s recent musings around the idea of a flat rate of 30 per cent relief, combined with the scrapping of the lifetime allowance, look simpler and more attractive.

“The LTA is a policy which is reaching breaking point, both in terms of the increasingly complex protections being introduced every time the LTA decreases and in terms of its negative effect of acting as a disincentive to save and to invest well.”