Change to ISA rules set for Sunday

More than 17m current savers are being reminded that Sunday 6 April sees the introduction of new rules governing ISAs.

Every adult now has an increased annual ISA investment allowance of £7,200. Up to £3,600 of that allowance can be saved in cash with one provider. The remainder can be invested in stocks and shares.

Angela Eagle MP, Exchequer Secretary to the Treasury, said: "We have made ISAs simpler to develop and extend saving and to ensure that tax relief on savings is more fairly distributed."

Savers are able to transfer some or all of the money saved in previous tax years from cash ISAs to stocks and shares ISAs without affecting their annual ISA investment allowance.

Savers are also able to transfer money saved in the current tax year in cash ISAs to stocks and shares ISAs. Such transfers must be the whole amount saved in that tax year in that cash ISA up to the day of the transfer.

Once money saved in the current tax year is transferred from a cash ISA to a stocks and shares ISA, it is treated as if it had been invested directly into a stocks and shares ISA in that tax year. The saver is able then to still save up to the remaining balance of their £7,200 in that tax year, including up to £3,600 in a cash ISA.

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