UK Savers To Benefit From Greater Tax-Free ISA Allowance

by Amanda Banks, Tax-News.com, London

09 October 2009

HM Treasury has announced that savers aged 50 and over can now take advantage of a GBP3,000 increase in the tax-free Individual Savings Account (ISA) allowance, with the limits rising to GBP10,200 (up from GBP7,200), of which up to GBP5,100 can be saved in cash (up from GBP3,600).

Over 6 million people aged 50 and over subscribe to an ISA each tax year, and this measure will enable each of them to invest an extra GBP3,000, of which up to GBP1,500 can be in cash.

Announcing the move, UK 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 GBP3,000 to GBP10,200 and from April next year for all savers."

The Exchequer Secretary, Sarah McCarthy-Fry added:

“This change will make a real difference to older people who want to save a little bit extra. Alongside measures such as the Child Trust Fund and the Saving Gateway, due to be launched next year, this shows that the government is committed to supporting savings for all generations.”

From April 6, 2010, the ISA increase will be available for all, regardless of age. Over 19 million people currently have an ISA and the increase will directly benefit over 5 million people who currently use their full ISA allowance.

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