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Have a happy new ISA year!

Dont wait! Dont hesitate! Your individual savings account (ISA) allowances are higher - maybe not by as much as we'd have liked them to be - for the first time since ISAs were introduced in April 1999.

Had your annual tax-advantaged ISA investment allowance been increased in line with inflation since April 1999 it would now be worth an extra £1,022. Instead, the Government has increased it by a less impressive £200 to £7,200 a year.

Find out more about the new ISA rules.

There's better news for Cash ISA savers, whose savings limit is boosted by £600 to £3,600 a year - thats an increase of 20% - comfortably more than inflation over the last nine years.

But there's more. The Government appears at last to have realised just how unnecessarily complicated the tax-advantaged savings regime has been. There's no more need to worry about Maxi this and Mini that, PEPs that you can't invest in any more and TOISAs rolling over.

Find out more about the new Cash ISA rules

An axe has been taken to the forest of ISA regulations, which may surprise some observers of this Government! But it's true and it makes life simpler and your savings and investments potentially more profitable for you.

Now there are just two types of individual savings account AND you can have both at once: a Cash ISA (in which you may save up to £3,600 tax-free) and a Stocks & Shares ISA (in which you may save up to £7,200 in a tax-advantaged manner). The only complicating factor is this - any money you save in a Cash ISA will reduce pound-for-pound the amount you may investment in a Stocks and Shares ISA.

What about personal equity plans (PEPs) and TESSA Only ISAs (TOISAs)? The trips and traps that have hedged these historic hangovers around are now removed - PEPs are reclassified as Stocks & Shares ISAs and TOISAs are reclassified as Cash ISAs. With the metaphorical wave of a wand your existing investments have become more flexible.

And that flexibility is extended even further with the ability now to switch your Cash ISA investments into Stocks & Shares ISAs without losing the tax-advantaged status of your savings. You may move all or part of your past Cash ISA savings into a Stocks & Shares ISA in addition to investing your current year ISA allowance.

What's more, if you don't like the look of the stock market right now, you may save up to £3,600 in a Cash ISA and then switch your current year Cash ISA savings into a Stocks & Shares ISA. Such transfers must be the whole amount saved in that tax year in the Cash ISA up to the date of transfer.

Keep the taxman's hands off your savings! Find the Cash ISA that is right for you.

You may then invest up to the remaining balance of the £7,200 ISA investment limit in your Stocks and Shares ISA or you may save up to £3,600 in a new Cash ISA. These transfer rules make a Cash ISA, where no tax is charged on interest unlike ordinary bank and building society accounts, a really useful short-term parking place for funds you may wish to invest in the stock market at a later date.

In fact the only thing you can't do with your ISA investments is switch Stocks & Shares ISA money into a Cash ISA - once youve committed it to the stock market it's committed although you may switch between different ISA providers and different ISA funds.

Not all ISAs are the same. Moneyextra is here to help you compare ISAs and find the right one for you.

You can, of course, withdraw it when you want to but you lose the tax advantages if you do so. Remember if you are considering transferring an ISA balance, you must make sure the transfer is carried out properly - don't attempt to do it yourself by withdrawing your ISA funds from your existing provider, you could lose the tax-advantaged status of your savings if you do.

One final thought for you - happy new year? Well we used to celebrate the new year at this time. In fact New Year's Day was originally 25 March, Lady's Day - the Feast of Annunciation. Then in 1752 when we got round to sorting out the mess of the Julian calendar and switched to the Gregorian calendar we lost 11 days, taking New Years Day to 6 April.

Of course, well before then we'd moved to celebrations on 1 January but the taxman still keeps to the old ways - which is why your tax year runs from 6 April to 5 April.

Read our Individual Savings Account Guides:

07 April 2008 © Moneyextra.com

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Our senior editor Robin Amlôt recommends you should consider taking independent financial advice before acting on any article. Please contact us for help with your individual circumstances if any assistance is required.