ISA Allowance Increases
06 Oct 2009
If you will be 50 years old or more on 5th April 2010, then from 6th October 2009, the country’s favourite savings product, the ISA, will become even more attractive for you.
Since it replaced the PEP (personal equity plan) in 1999, the ISA has been through a number of changes and in this year's budget, the Chancellor announced the latest change, which will see the annual allowance increase from £7,200 to £10,200.
The new £10,200 limit will apply to every eligible UK resident from 6th April 2010, however, if you are 50 years old on or before 5th April 2010 you can take advantage of the higher allowance from 6th October 2009.
Just like the old £7,200 allowance, up to half (£5,100) can be put in cash and the remaining £5,100 in equities, or you can put your entire £10,200 allowance into equities. It is also useful to remember that you can now transfer the money from your cash ISAs into equities if you feel now is the time to take advantage of the potential for higher returns that equities can give*.
Many people are now seeing this as an ideal time to invest in equities again, as stock markets continue to show promising signs whilst still remaining at lows relative to the heights they reached in 2007. With this in mind, the increase in ISA allowance should come as welcome news**.
If you were born on or before 5th April 1960, you can call 0800 294 7221 from the 6th October to take advantage of your increased ISA allowance. For those of you who have already invested in an ISA for this tax year, you can call our Investments Team who will top-up your ISA to the new allowance for you and update you on the funds appearing in the latest version of our Hero fund list.
* Transfer charges may apply and you could lose out on any growth in value during the transfer period.
** You should be prepared to invest for a minimum of 5 years.
