Savers have been given a Budget boost with the news that the annual ISA limit will increase to £10,200, up from the current limit of £7,200. Chancellor Alistair Darling also revealed that the amount allowed to be invested into the cash element of the tax-free investment vehicle will be increased from its present level of £3,600 to £5,100. The new allowances will come into effect for those over 50 in the current tax year, although the first deposits will not be permitted until 6 October. The higher limits will then apply to everyone else from 6 April next year. "Today's decision to increase ISA allowances will be welcome news to savers who have seen their returns reduced significantly following a succession of base rate cuts," said Flavia Palacios Umana, head of Halifax Savings products. "Now is a challenging time for savers, especially for pensioners who rely on returns to supplement their monthly income, and we are fully behind this move by the Chancellor to help savers make more of their money in this historic low rate environment."
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