Isa allowance extension 'a major bonus for savers'

The additional £3,000 allowance for Isas in the new financial year has made the investment method a more attractive way to save, it has been claimed.

Martin Bamford, chartered financial planner for Informed Choice, said consumers were benefitting from the new £10,200 tax-free allowance, which became available to all savers on April 6th 2010.

"As soon as the allowance crossed the £10,000 level, it was seen in the eyes of investors as something very worthwhile to use," he claimed.

This view is supported by figures from Fair Invest, which report that Isa applications rose by 52 per cent in the first three days of the new financial year.

Mr Bamford said the new allowance means a quicker investment return for savers.

"Under the new rules, a couple can shelter over £40,000 of their investments from tax within a couple of weeks at the end and start of the tax year."

He denied, however, that this could herald the prospect of the UK becoming a nation of savers.

"We are still a long way from our previous savings ethic so it would need a major change in attitudes for people to stop their consumerism altogether and divert that cash to savings."

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2010-04-15 13:09:59 © Moneyextra.com