Budget 2010 – ISA limits increase
The Chancellor announced an increase in the individual savings account (ISA) limits from £7,200 to £10,200. This increase puts all savers in the same position as savers over the age of 50. A maximum of half the ISA limit, £5,100 can be invested in cash. These changes will takeeffect from 6 April 2010.
The Chancellor also announced that from 6 April 2011 the ISA limits will increase annually in line with inflation. The new limits will be rounded to the nearest multiple of 120 to allow savers who make monthly savings to calculate their monthly payments more easily.
An ISA account is free of all income tax and capital gains tax. Eligible holdings are cash (up to half the maximum), national savings products, life insurance products, stocks and shares. Account holders may make withdrawals at any time without the loss of tax relief.