The chancellor has rebalanced the tax system in favour of the saver.

That is the industry's verdict on the coalition government's sixth and final budget which completed a year of massive upheaval in long-term savings.

The Tax-Incentivised Savings Association, which earlier this month published a major report urging the adoption of pro-savings policies, applauded the "further shift towards recreating a culture of saving rather than debt".

Jason Hollands, managing director at Tilney Bestinvest, said: "It is worth reflecting that the Coalition has presided over an incredible amount of change to Isas, all of which have been broadly positive, including a beefing up of the allowance, removing restrictions on the amount of cash that can be held, widening the range of eligible investments to include AIM companies (and shortly P2P lending), and allowing Isa assets to pass to a surviving spouse on the death of their partner, without the loss of tax benefits."

Now comes the Personal Savings Allowance of £1000 for basic rate and £500 for higher rate taxpayers from April 2016. It will add to a rise in the tax threshold from next month's £10,600 to £11,000 within two years, and even an uplift in the higher rate threshold to £42,385 next month rising to £43,300 in April 2017.

Dr Ros Altmann, pensions expert and government tsar, said: "Savers have paid tax on their income when they earned the money, so allowing them to earn interest on it free of tax makes sense."

An early survey by money.co.uk found 30per cent of consumers saying interest rates were the problem for savers not tax, 44per cent saying it wouldn't make a difference as they didn't earn enough interest, and 45 per cent saying they wouldn't be saving any more.

But Julie Hutchison, Standard Life's savings and tax expert, said: "The combination of a higher starting point for income tax, a new band of tax-free savings income and the ability to transfer some unused personal allowance to a spouse or civil partner are all positive aspects which re-balance our tax system in favour of the saver - if you're on a lower income, you'll keep more of your money and pay less tax."

Basic rate taxpaying savers earning the current best easy access rate would be able to deposit up to £71,429 before paying tax on the interest, says SavingsChampion.co.uk. For those locking into the best five-year fixed rate, the tax-free maximum would be £33,113 of savings.

Anna Bowes, director of the independent savings advice site, said that with inflation down to 0.3per cent, "saving has finally become an attractive proposition".

Dean Lamble, managing director at SunLife, said: "The 'savings revolution' has begun, and not a moment too soon. Our research shows the average family has £9,280 in savings, and these changes may encourage people to save more."

For people with that level of savings, the present annual Isa allowance of £15,000 (edging up to £15240 from April 6) every year is theoretically more than enough. New flexibility, which will allow people to replace money withdrawn from an Isa freely up to the limit, will also not be needed by people putting modest amounts away. Nor will it apply to stocks and shares Isas.

But given that around two thirds of adults or 34 million people have a taxable savings account in the UK, yet over five million of those do not have an Isa to shelter savings from tax, the Personal Savings Allowance will at last prevent unwary savers paying unnecessary tax.

Non-taxpayers, notably non-earning spouses and pensioners, will no longer need to fill in an R85 tax form to prevent their bank or building society deducting tax at source from their savings.

Calum Bennie, savings expert at Scottish Friendly, said: "The changes means cash Isas, which continue to be plagued by low rates -are now likely to become the preserve of higher rate taxpayers - although it has to be questioned if there is any future for the cash Isa at all, apart from the newly announced Help to Buy Isa."

The government will add up to £3000 to savings of up to £12,000 in a Help to Buy Isa. However the plan would take five years at £200 a month saving to earn that bonus, with the attendant risk of house price inflation, and Homes for Scotland said it would be "of little use North of the border unless there is help to build the homes that are needed in the first place".

There were also questions over the chancellor's adoption of Labour's policy of a further reduction in the lifetime allowance for pension contributions, from £1.25m to £1m.

Alan Higham at Fidelity Personal Investing said: "It is very easy to dismiss this as capping excessive tax relief given to very wealthy people. However, if you retired today at age 65 and wanted to buy an inflation-linked pension that continues to pay 50per cent to your spouse after your death - as is common in public service defined benefit schemes - then this would amount to little more than £26,000 a year income."

Chris Noon, partner at Glasgow-based Hymans Robertson, said: "With ever increasing life expectancies, another cut in the lifetime allowance will make it difficult for many members of defined contribution schemes, who would not consider themselves high earners, to save enough to maintain their living standards through to the end of their retirement."