A financial expert has branded the ISA, the government's tax-free savings scheme, "pointless" because it only benefits the wealthy.
ESAs are a way for millions of middle-income families to save tax-free interest
Finance expert Paul Lewis told the Resolution Foundation panel that ISAs are the wrong policy because they are "targeted at high earners who don't need extra government help to save".
A report by think tank Resolution Foundation published last Monday found that while the six richest people benefited from tax-free ISAs, those on low incomes or few savers did not.
The think tank recommends an ISA with total tax-free savings of £100,000. All of them."
The panel, which discussed the report presented by Foundation Solution, called on the government to take effective measures to save middle and low income families.
In the first initial payment, automatic opening of accounts for international borrowers is proposed.
The report says Savings Allowance allows basic-rate taxpayers to receive up to £1,000 of tax-free interest on savings, and higher-rate taxpayers £500. But he said the support was "skewed in favor of wealthy investors".
For working-age adults, around £3 in £10 saved in an ISA goes to the top 10% of earners.
The Help to Save scheme is aimed at low-income families who are eligible for benefits, where people can save up to £50 a month and get government help.
But the foundation says take-up of the program is low, with fewer than one in 10 eligible participants taking advantage.
While this suggests the inability of many users to save, those who join the scheme appear to be keen to save as much as possible, with 92 per cent of monthly savings being a maximum of £50, the fund added.
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The report says Chancellor Jeremy Hunt should review austerity policies and focus on encouraging more people to save.
He said: "Taking the existing schemes together, current policies either do not specifically target harmful spending across all types of ISAs, or there is no scope to significantly expand the distribution of household savings (such as the Enrollment Support Scheme)."
Molly Broome, economist at the Resolution Foundation, said: "Britain is not a country of austerity. The lack of financial stability has left many vulnerable during the cost of living crisis, with households falling into debt and falling behind on paying their bills.
"Government incentives are there to save, but not to such an extent – instead of supporting an increase in the number of people who save, they support tax breaks for people who save a lot."
What is an ISA?
An Individual Savings Account (ISA) is a savings account where you pay no tax on the interest earned.
Each ISA has an annual investment limit.
There are two main types of ISA to choose from, cash only and stocks and shares.
There are other more specialized options.