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Droves of over 50s benefit from new ISA limits

Droves of over 50s benefit from new ISA limits

Category: Savings

Updated: 04/03/2010
First Published: 04/03/2010

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Almost half of ISA savers aged 50 or over have taken full advantage of the extended ISA rules, with many more set to follow suit.

While the new limit of £10,200, £5,100 of which can be invested in cash, is not universally available until the new tax year begins next month, over 50s have been able to top up their accounts since October.

And research conducted by Barclays Wealth has revealed that 48 per cent of eligible savers have subscribed to the full new limit, with a further eight per cent subscribing more, but not to the maximum.

Only one in five savers aged 50 or over said they had not yet invested more money.

Despite some concern that consumers are not aware of the changes, just four per cent of respondents said that they did not know their entitlement had been increased.

"As the increased upper limit comes into play for all investors on 6 April 2010, investors should recognise the importance of utilising the full new allowance," said Barbara-Ann King, head of investments at Barclays Stockbrokers.

"Individuals could invest at least £17,400 tax-free over the course of the next six weeks; a married couple could invest nearly £35,000 between them (£40,800 if they are already over 50), and then a further £20,400 each tax year. It is easy to see how significant amounts of money exempt from income and capital gains tax could quickly be built up.

"For those investors intending to take advantage of this year's ISA allowance, they should do so before the end of the tax year, or they will lose it."

Separate research found that, year-on-year, the total value of ISA contributions has increased by two thirds for the tax year to date.

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