The current limits on ISAs in the UK are set to see an increase of £470 in 2011, following on the increases to the limit made at the inception of the current tax year, which pushed the annual deposit limit up to £10,200, up from its previous limit of £7,600, something only made available previously to savers over the age of 50 from October of last year.
The rate of inflation from the month of September of this year will be utilised in order to determine what the new ISA savings allowances increases will be from April of 2011, which is in line with a recently made Budget announcement.
The annual limit on ISA contributions is expected to be raised to £10,670 at the inception of next year’s financial cycle, which is an increase over the current £10,200 limit. Fully half of that limit, £5,335, is eligible for deposit into a cash ISA, as an alternative to investing the full £10,670 into an ISA that is populated by shares and stocks.
Current estimates in regards to tax-free ISA savings accounts indicate that in excess of 20 million people in the UK currently have one.
ISAs that buy shares and stocks have become more popular recently as a result of savers seeking higher returns on their investment in spite of the inherent risk that comes with participating in those particular investment opportunities.
Fidelity Investment Managers’ Rob Fisher commented on the phenomenon, stating that investors and savers should focus on depositing as much as they can afford to into an ISA savings product every year, especially in light of the recent changes to taxes in the UK.
Mr Fisher also said that in excess of 42 per cent of the British populace are not availing themselves of their full ISA allowance, thus resulting in actually having to pay more in taxes every year than they would otherwise.