ISA Allowance Limit Increase for Over 50s

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ISA Allowance Limit Increase for Over 50s

The amount of money that can be saved in an Individual Savings Account (ISA) is being increased from the current level of £7,200 to £10,200 for people born on or before April 5 1960, i.e. those over the age of 50.

From 6 October, over-50 savers will be able to top up their ISA to a new tax-free limit of £10,200. Up to £5,100 of the £10,200 annual allowance can be held in a cash account, up from the current cash ISA limit of £3,600, while the remainder can be invested in stocks and shares.

According to price comparison and service switching website, uSwitch.com, a 50-year-old who takes full advantage of the new £5,100 cash ISA allowance each year could build up tax-free savings of £104,000 between now and age 65.

What about the rest of us?

Unfortunately, savers under the age of 50 won’t be able to enjoy the increased cash ISA allowance, which was announced in this year’s budget, until the beginning of the new tax year next April.

Are all lenders offering the new limit?

According to recent financial data all lenders have confirmed they will allow their over-50 customers to make extra contributions to their ISAs from October 6, apart from online bank Egg which will offer the new limit to all customers from next April.