Isa allowance rising to £10,200 

In the Budget in March, the chancellor announced a rise in the Isa limit which gives the Savers over 50 first bite at the opportunity chance to top up tax-free savings in Individual Savings Accounts (Isas) from October.

The annual limit will go up from £7,200 to £10,200 from 6 October for those over 50 years old and for everyone else from April 2010. The limit for the cash ISA element in the overall allowance will rise from £3,600 to £5,100. The remainder can be invested in shares.

We’ve heard some clients questioning the merit of investing in ISA’s because providers have allowed the rates to drop significantly, with some providers offering rates as low as 0.25%. However, remember you’re not stuck with your present account as the ISA allowance can be transferred to another provider. Despite the generally depressed rates if you shop around you can really improve your returns – in fact we’ve just made a client £275 extra a year by moving their cash ISA to a new provider!