Savers encouraged to opt for an ISA as allowance rises today

From today, the total Individual Savings Account (ISA) allowance for people over 50 will increase from £7,200 to £10,200.

The £3,000 increase, which was announced in this year’s Budget, is eligible to those born on or before 5 April 1960. For everyone else, the limit will rise from 6 April 2010.

ISAs, which were launched a decade ago by Gordon Brown (who was Chancellor at that time), were introduced to encourage Brits to save without having to pay money to the tax man.

Currently, there are around 19 million ISA account holders in the UK, with 5 million utilising the full allowance each year.

According to Rob Fisher, head of personal investments at Fidelity International, the new limit “present investors with a bigger ISA opportunity than ever before.”

Commenting on the move, Chancellor Alistair Darling said: ”I’m determined to help savers, because while low interest rates have helped millions of homeowners, I also know that they have hit those who rely on their savings to get by.

‘This is why I am increasing the ISA allowance for all over-50s, by £3,000 to £10,200 and from April next year for all savers.”

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