ISA allowance increased

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ISA allowance increased

Thu 23rd Apr 2009

The government has announced that the tax-free savings allowance for individual savings accounts (ISAs) will increase this fiscal year in a bid to encourage more Brits to save.

In his Budget speech yesterday, Alistair Darling unveiled the increase, which will enable savers to earn tax-free interest on £10,200-worth of savings, rather than £7,200, which has been the limit until now.

High street banks, including Barclays and HSBC, welcomed the chancellor's move.

Lee Raybould, head of savings at Nationwide, also praised the decision.

He said: "We're pleased that the chancellor has acknowledged ISAs in his Budget and expanded the allowance to £10,200.

"Linking the ISA subscription limit to inflation will provide an added incentive for consumers to save."

Other measures announced in yesterday's Budget included an extension of the stamp tax holiday and the pensioners' winter fuel allowance.

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