New ISA limits for over 50s take effect
by Gill Montia
Story link: New ISA limits for over 50s take effect
As of today, the limit on a cash ISA has been raised to £5,100, for anyone aged 50 by 6th April 2010, meaning an extra £1,500 can be invested, tax-free.
The limit on a stocks and shares ISA has also increased to a maximum £5,100 for those taking advantage of the full cash ISA limit, or £10,200 for investors with all their savings in a stocks and shares ISA.
The previous allowance, which remains until the start of the new tax year for the under 50s, was £7,200 overall, which could be made up of £3,600 in a cash ISA and £3,600 in a stocks and shares ISA, or £7,200 in a stocks and shares ISA.
The response from providers is varied but many are offering top-up facilities for existing plans and increasing the maximum monthly deposit for regular saver ISAs.
Analysts estimate that the new limits provide an opportunity for older Britons to protect combined investments of £63 billion from tax and if previous trends are followed, the majority will opt for stocks and shares ISAs, leaving around 35% preferring the cash version.