What is an ISA? - new rules for 2011 onwards
A number of important changes to the ISA (Individual Savings Account) regime came into effect from 6 April 2011. These changes were designed to present ISAs in a simpler and more flexible way for investors.
Summary of the changes
- ISA investors are able to invest in up to two separate ISAs each year: a Cash ISA and a Stocks and Shares ISA.
- Existing PEP investments have now automatically become ISAs; the changes align the rules for the two schemes.
- The amount of money you can put into an individual savings account (ISA) each year has increased from £10,680 to £11,280.
- The new annual ISA allowance includes £5,640 that can be saved in a cash ISA – up from the previous limit of £5,340.
- The entire £10,680 can be invested in a Stocks and Shares ISA with one provider.
- Up to £5,340 of the allowance can be invested in a Cash ISA with one provider whilst the remainder can be invested in a Stocks and Shares ISA.
- It is now possible to transfer new and existing Cash ISAs to a Stocks and Shares ISA.
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