According to the Investment Management Association, the proposals should be put into place in chancellor Alistair Darling's Budget next year, as they will serve to simplify matters for the average investor .
Currently, rules regarding income tax rates and length for which assets are held are "hopelessly confusing", said a spokesperson for the body.
Richard Saunders, the Investment Management Association, commented: "With a single rate at a modest 18 per cent and an annual exempt amount of £9,200, people will know where they stand.
"Most savers too will be better off."
He added that Britons using an individual savings account will face no capital gains tax on the first £7,200 which they place into the pot.
Abbey recently announced the launch of a new range of fixed-term savings bonds that offer opportunities for youngsters and the over-50s. The savings vehicles can be opened with a £1 stake and promise a guaranteed return of the amount stashed away.
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