The Conservatives are poised to propose new tax breaks to help recession-hit savers and pensioners, but advisers say millions of people could make better use of the existing rules to ease the pain.

George Osborne, the shadow chancellor, told The Sunday Times last month that the Tories would scrap Labour’s proposed 0.5% rise in National Insurance contributions, due to come into force in 2011.

He also promised to help savers and pensioners, who have been hit hard by the cut in Bank rate to just 2%, the lowest for more than half a century. One option under consideration is the scrapping of basic-rate tax on savings, which would cost the Treasury £2.4 billion.

The Tories are also said to be looking at increasing the annual limit on tax-free Isas — currently £3,600 for cash and £7,200 for shares — and increasing the threshold at which pensioners start to pay tax.

Over-65s already benefit from a higher personal allowance — the amount of income on which we pay no tax — of £9,030 compared with £6,035 for the under-65s. Those over 75 qualify for £9,180.

However, tax experts said the limits could be much higher to take more of pensioners’ income out of the tax net. Each £100 increase in the threshold would cost the Treasury £75m. Advisers have also called for an overhaul of the onerous way in which the additional allowance is “clawed back”. Under this system, the higher allowance is reduced by £1 for every £2 of income above £21,800 — in effect a marginal rate of 30% instead of 20%.

For example, while those with income from pensions and savings of up to £21,800 are entitled to the full £9,030, someone with £25,000 would qualify for just £7,430 (the allowance is reduced by £1,600 for income of £3,200 above the threshold). The additional allowance disappears when income reaches £27,790 for someone aged 65 to 74.

John Whiting of accountants Price Waterhouse Coopers said: “This is the government giving with one hand and taking away with another.”

However, there are ways to beat the clawback system, as well as other tax tips to reduce the savings pain. Here we offer some advice.

Are you entitled to a savings-tax refund?

HM Revenue & Customs (HMRC) estimates that some 2.5m to 3m savers could be eligible for a refund because they have overpaid income tax on savings in the past.

Basic-rate tax at 20% is deducted from savings interest at source (in other words, taken off by your bank or building society before it goes into your account). However, people whose income is below the personal allowance are eligible to have their interest paid gross. All you need to do is fill in an R85 form and send it to your bank and building society.