ISA increases great for over 50s' saving

Monday, 15 February 2010

Savers over 50 have been certainly taking advantage of last October's move to increase the ISA limit to £5,100. In fact, they have been able to save £10,200 each tax year.

Adrian Lowcock, senior investment advisor for Bestinvest says of Alistair Darling's decision to increase ISA limits for the over 50s that it "has been a ray of light in an otherwise grim outlook for tax benefits and wrappers," adding that "the response has been huge from investors taking up the extra allowance."

Investors are being encouraged to take full advantage of the increased allowance which is to be extended to all ISA savers after 6 April 2010. The increase is from £7,200 to 10,200 a year.

Virgin Money spokesperson Grant Bather said: "With the ISA allowance of £10,200 to be extended to all savers in the new tax year, we would urge all investors to consider making the most of the increase in the tax efficient allowance."

Recent research published by Virgin Money last week confirms that, since the increase in the saving allowance on 6 October, savers over the age of 50 have contributed at least twice as much in lump sums to share-based ISAs. This figure is up 120 per cent in the year on the year in the same quarter.

Mr Bather said: "The decision by Chancellor Alistair Darling to increase the ISA threshold to £10,200 for the over-50s has been very popular."

There is also more scope for over 50s who wish to invest in equities before 6 April. Again, they can invest a maximum £10,200 in ISAs, which includes their cash holdings.

The increase for over 50s was introduced to help people who have retired and rely on the income from savings to help meet their day-to-day needs and to survive during this time of low interest rates.

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