The Government should make annual increases in the ISA limit to keep it "at least in line with inflation", according to the Investment Management Association (IMA).
In its pre-Budget submission to the Chancellor of the Exchequer, the IMA is calling for a number of reforms to help increase consumer confidence in long-term savings.
In addition to annual increases in the ISA allowance to cope with inflation, the IMA wants the Government to abolish stamp taxes on UK equities, while also abolishing the requirement for pensioners to turn their pension into an annuity when they reach 75.
Commenting, Richard Saunders, chief executive of the IMA, said: "It's important that a clear message is delivered about the benefits of long term saving."
Urging the Government to cancel stamp duty on UK equities, Mr Saunders said it represents a "real drain on the value of people's investments and savings" and can also have an impact on the "cost of equity for companies on trading activity".
The IMA claims there is also the possibility of opening up new opportunities for the UK fund industry which will "enhance its competitiveness and bring economic benefits".
"Major progress has been made in a number of areas, but the UK cannot rest on its laurels. A further number of key steps are now required to ensure that the UK is seen as a serious domicile for fund management," Mr Saunders said.
He added: "If we are successful in this endeavour, then the Government stands to gain through an increase in tax revenue."
© Fair Investment Company Ltd