Biometric technology, which uses fingerprint data and iris scans to identify people, offers enhanced security when used with smartcards, according to Andy Kellett, senior research analyst at Butler Group.
"There are advantages in terms of using smartcards in conjunction with biometrics." Biometrics offer an extra level of security, Kellett said.
He also believes that storing personal data on identity cards could benefit users in the event of an emergency.
"The smartcard could be, for example, both your driving licence and your medical records, which would be useful in the event of an accident."
Last week home secretary David Blunkett announced that the Government would be publishing a consultation document on the so-called "entitlement cards" later this year.
Officials said that the report will cover the issue of identity fraud and a range of possible responses in the short-, medium- and long-term.
A Home Office spokesperson said, "The Government wants the discussions to be sufficiently broad-based so that the consultation paper will be balanced and comprehensive."
Last year Computer Weekly revealed that a Home Office agency had successfully completed a technical feasibility study into a photocard passport which could form the basis of a voluntary national identity smartcard.
There has also been growing speculation that the Government will use biometric technology on entitlement cards following its recent decision to issue biometric cards to asylum applicants.
The Application Registration Card contains the bearer's unique fingerprint data as well as their photograph, name, date of birth and nationality. The card also includes a secure updatable chip for additional information such as the holder's address.
Asylum applicants at the Immigration and Nationality Directorate Headquarters in Croydon, London, are the first to be issued with the cards, although a phased rollout to other locations, including the UK's main arrival ports, is planned.
Home Office officials predict that this will be complete by the autumn.