ISA allowance to increase next year

| October 14, 2010
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It is understood that the amount of money people can save into an Individual Savings Account (ISA) will increase by £470 next year.

From April 2011, the annual tax-free savings allowance will rise from £10,200 to £10,670, while the amount for a cash ISA will rise from £5,100 to £5,335.

The rise is in accordance with the announcement made in the Budget and the Treasury is set to provide more details in the next couple of weeks.

Figures show around 18 million UK residents have a tax-free ISA.

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

Half of the total can be saved in cash, with half, or all, in stocks and shares.

The accounts have been growing in popularity over recent times – particularly in light of the low interest rate environment.

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