Savers not geared up for change in ISA limits this April

Thousands of consumers could potentially lose out on their tax free allowance from the start of the new tax year.

New research from Barclays shows that 42 per cent of consumers are unaware that new limits kick in for ISAs from 6 April 2010. In addition, almost three quarters don't know how much they can invest into a cash ISA from the new tax year.

Chancellor Alistair Darling announced in last year's Budget that the amount people could save in ISAs each year was being increased from £7,200 to £10,200, £5,100 of which can be held in a cash ISA. The new limit came into force from October 6th for people born before April 6th 1960 and 6th April 2010 for everyone else over the age of 18.

A worrying 70 per cent of people do not know the maximum they can invest into a cash ISA. Surprisingly, despite the changes taking place for the over 50s last October, 60 per cent of this age group still don't know what their maximum ISA limit is.

Andy Gray, head of savings for Barclays said: "It's surprising to see that the plans to increase ISA limits across the board haven't really registered with UK consumers yet. We would urge people to review their savings to ensure they don't miss out on their tax-free allowance for this year and from 6 April 2010 when the new limits apply to everyone."

Regional figures reveal that some cities and towns are not as prepared as others. Over half of savers in Newcastle, Blackburn, Stoke, Brighton, Bradford, Oldham, Wolverhampton and Manchester are not aware that the limits are increasing from 6 April 2010. This compares with Newport, Worcester, Colchester, Cheltenham, York, Edinburgh, Portsmouth and Derby where at least two thirds of savers are aware of the changes.

Barclays has been allowing customers who were 50 or over on or before 5 April 2010 to invest up to £5,100 in a cash ISA. Barclays Golden ISA currently pays 2.58% AER, although customers who opened the account before 1st June 2009 will also receive their 12 month introductory bonus on the top-up amount as well as their existing funds.