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ISA allowance increased from 6th October 2009

In his 2009 Budget speech on the afternoon of 22nd April 2009, Chancellor of the Exchequer, Alistair Darling, announced that with the maximum amount which can be invested in a tax-efficient ISA will rise from £7,200 to £10,200.

Investors will be free to choose whether to invest the full £10,200 into the Stocks and Shares element or to place up to £5,100 into a Cash ISA, with the remainder of the allowance being invested in a Stocks and Shares ISA.

When do the new ISA Allowance Limits Start?
This change in ISA allowance will see the total amount which can be invested in a tax year increase to £10,200 from 6th October 2009 for those aged over 50 with the under 50’s being entitled to the additional allowance from 6th April 2010.

For a Cash ISA investor this means that an additional £1,500 can now be invested in a Cash ISA. However with the average Cash ISA paying in the region of 2% gross, consideration needs to be given to transferring cash holdings to alternative types of ISA investments to achieve potentially greater returns.

If you think you may be affected by these changes and you would like to review your ISA portfolios you need make sure you talk to your independent financial adviser immediately.