As of April next year, an extra £480 will be added onto the annual ISA allowance, a welcome announcement for Britain's 20 million ISA savers.
The government initially promised that there would be a yearly increase in the ISA allowance in the Emergency Budget in June, but there was mass speculation that the promise may not be kept.
However, the Treasury kept its word and, in a bid to assist those with monthly savings plans by making the increase divisible by 12, the limit has been raised to £480, setting the new limit at £10,680 for the tax year of 2011-12. The new limit of £10,680, a rise from the current £10,200, will end on 5 April 2012.
A Treasury spokesman said, “The Government is committed to encouraging saving and putting the right frameworks in place for this to happen.
“The Budget announced that the amount savers can pay into their ISAs each year will increase with inflation. We can now confirm that savers will, from 6 April 2011, be able to pay an extra £480 into their ISAs each year, including an extra £240 into their cash ISAs,” the spokesman added.
