New limits on ISAs for next year
December 27, 2007
It has been announced that as of April next year the limits on Individual Savings Accounts, known simply as ISAs, will be increased.
The cash and overall investment limits are to go up in 2008, but it could mean that the amount some people can invest in stocks and shares will go down. At present savers can invest up to £3000 each tax year in a mini cash ISA, up to £4000 per tax year in a mini stocks and shares ISA, or up to £7000 in a maxi ISA, £3000 of which can be in cash.
As of April 2008 savers will be able to invest up to £3600 in a mini cash ISA and up to £7200 in a stocks and shares ISA, with the overall investment limit going up to £7200 in total. However, this means that those wishing to invest the maximum cash limit of £3600 will only be able to invest a further maximum £3600 in stocks and shares. Over sixteen million investors hold ISAs in the UK.
Richard Saunders of the Investment Management Association, stated: “It is good to see the Government recognising the importance of ISAs in the UK savings market. But a 3% increase after nine years is not much and we will look for more in the future.”
Anne Young, Technical Director at Scottish Widows, added: “The changes to the ISA rules will not come in until 6 April 2008 which should give consumers and the industry time to adapt to the new rules. In particular the removal of the mini/maxi distinction should help members of the public better understand the ISA rules.”
ISAs were introduced in 1999, and enable savers to enjoy savings that are not subject to income tax or capital gains tax, which is why they have proven so popular.
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