Your questions answered about the ISA rule
changes
9 July 2009
In April 2009, the Government announced changes in the tax-free
allowance for Individual Savings Accounts (ISAs).
What changes are taking place?
From 6 October 2009, the ISA subscription limit will
increase to £10,200 for anyone eligible to invest in an ISA who was
born before 6 April 1960 (i.e. who will be aged 50 or over during
the current tax year).
From 6 April 2010, this higher limit will apply to all
eligible ISA investors.
What do these changes mean?
Up
to £10,200 can be saved in stocks and shares ISA.
Alternatively, up to £5,100 of the new ISA allowance
can be saved in a cash ISA with one provider. The remainder of the
£10,200 can be invested in a stocks and shares ISA with either the
same or another provider.
The following examples show how you could benefit if you were
born before 6 April 1960.
Example 1
You are aged 56 and at the beginning of tax year 2009/10 you
wanted to invest the maximum into a stocks and shares ISA and pay
equal monthly amounts each tax year. You therefore commenced saving
£600 per month. To continue to maximise your monthly savings on an
ongoing basis, you could increase your monthly contribution to £850
in October 2009. The remaining £1,500 of your ISA allowance could
also be invested in the same stocks and shares ISA, or a
combination of both.
Example 2
You are aged 70 and have opened a cash ISA in 2009/10 in which
you have subscribed £3,600. From 6 October 2009 you will have an
ISA allowance of £10,200. You could save up to another £6,600 in
ISAs. This could be up to £1,500 in the same cash ISA, or up
to £6,600 in a stocks and shares ISA with either the same or
another provider, or a combination of both.
Example 3
Your 50th birthday falls on 15 March 2010. You opened up a
stocks and shares ISA in 2009/10 in which you subscribed £7,200.
From 6 October 2009 you could save up to another £3,000 in ISAs.
This could be up to £3,000 in the same stocks and shares ISA, or up
to £3,000 in a cash ISA with either the same or another provider,
or a combination of both.
Where can I find out more?
Please speak to your local Forester Life Adviser, contact our
Customer Services Team on 08457 990011 or e-mail: customer.services@foresters.co.uk