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ISA limit set to rise further
Following a first decade of the ISA which saw just one increase in the
allowances available to all savers, the government has pledged an annual
increase for the duration of the next parliament.
While the ISA limit for all savers is being increased to £10,200 from 6th
April 2010, this could grow to £11,200 within five years after the move to
link increases to the level of inflation from 2011-12.
Assuming the government's target two percent rate of inflation, ISA limits
could reach £10,440 in 2011-12, and break the £11,000 barrier within five
years.
The new limits, which will be rounded to the nearest £120, will be
calculated using the Retail Price Index for the September prior to the new
tax year and announced a few months before the tax year starts.
In the event of deflation, the allowance levels will be frozen.
