ISAs popular with older investors

The government’s ISA allowance increase for savers over-50 has proved hugely popular, with older investors more than doubling their lump sum contributions into share-based ISAs, according to new research from Virgin Money.

Income funds have proved the most popular, with contributions rising 130% in the three months from 6 October 2009 to 5 January 2010 compared to the same period the previous year, Virgin Money found.

Lump sum investments increased 120% on year during the same three month period.

On 6 October, savers over 50 could take advantage of an increased ISA allowance, meaning they could invest up to £10,200 in the tax-free accounts.

“The decision by Chancellor Alistair Darling to increase the ISA threshold to £10,200 for the over 50s has been very popular,” said Grant Bather, Virgin Money spokesperson.

“With the ISA allowance of £10,200 to be extended to all savers in the new tax year we would urge all investors to consider making the most of the increase in the tax efficient allowance.”

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