As the new tax year is fast approaching, with it comes another tax free Individual Savings Account (ISA) allowance.
But this year brings some good news for the 20 million ISA savers in the UK, as the government has announced plans to increase the ISA limit.
As of 6 April, the amount savers can put away into ISAs to avoid paying tax on the interest will rise by £480 per year to £10,680.
In the Emergency Budget in June, the government had initially said that there would be a yearly increase to the ISA allowance, but there was a lot of speculation as to whether or not this promise would be kept.
However, the Treasury stayed true to its word, with plans to introduce the new limit of £10,680 for the 2011-12 tax year, up from the current limit of £10,200.
This means that savers can either put up to £5,340 into a cash ISA with the option of investing the remaining £5,340 into a stocks & shares ISA; invest up to the full amount into a stocks & shares ISA; or a combination of the two.
In October 2009, the ISA limit rose from £7,200 to £10,200 for all UK savers aged 50 and over, which became available for everyone else at the start of the current tax year.