Individual savings account allowance rises to £15,000

The annual individual savings account (Isa) allowance will increase to £15,000 from today (1 July 2014).

Share schemes

The increase, which was announced in Chancellor George Osborne’s Budget in March, allows staff transferring exercised shares into an Isa from a maturing employee share scheme to protect more of their gains over the tax-free limit, of £10,900 from April 2014, from capital gains tax (CGT).

The current limit is set at £11,520 for a stocks and shares Isa and £5,760 for a cash Isa.

Also from 1 July, the two types of Isa have been merged in to a single new Isa taking both cash and shares.

Laith Khalaf, head of corporate research at Hargreaves Lansdown, said: “Isas are hugely popular and have been a really successful initiative for getting people to save.

“More and more, employers are looking to harness this popularity, and are using workplace Isas as a complement to their occupational pension.

This year’s Budget opened up the chance for workers to manage their own retirement savings, and a workplace Isa allows them to do the same with their short and medium-term savings too.

“Workplace Isas suit a wide spectrum of employees, such as younger workers saving for a house deposit, parents saving for a university fund, or high earners who have used up their annual £40,000 pension allowance.”