The Help-to-Buy ISA will see the Government boost first time buyers’ savings by 25%.

Osborne said that for every £200 people save for a deposit the government will top up by £50.

He said: “We are working hand-in-hand with first time buyers.

“For a person saving £12,000 we will match them with £3,000 of government money.”

Budget documents state: “The scheme will work by providing a government bonus to each person who has saved into a Help to Buy: ISA at the point they use their savings to purchase their first home.

“For every £200 a first time buyer saves, the government will provide a £50 bonus up to a maximum bonus of £3,000 on £12,000 of savings.

“Savers will have access to their own money and will be able to withdraw funds from their account if they need them for another purpose but the bonus will only be made available for home purchase.”

The new ISA was one of a raft of populist measures revealed by Osborne in the run-up to May’s election.

He said: “Britain is walking tall again and we are seeing a truly national recovery.”

The chancellor was also boosted by increased growth forecasts to 2.5% 2015, up from 2.4% predicted in December, followed by 2.3%, 2.3%, 2.3% and 2.4% in the next four years.