ISA increase lower than expected after budget.
The Chancellor disclosed in the Budget that the measure for increasing the annual ISA allowance will move to using the Consumer Prices Index rate of inflation from the coming year.
The Tax Incentivised Savings Association stated that it was ‘disappointing’ that the ISA allowance is to increase yearly based on the level of inflation outlined by the CPI.
Last year the government said the ISA allowance would change each year in line with the rate of inflation measured by the Retail Prices Index – normally a higher rate.
The latest inflation figures published by the Office for National Statistics this month showed CPI inflation was 4.40 per cent and the RPI rate was 5.50 per cent.
Based on RPI figures for September 2010, the cash ISA limit will be increasing to £5,340.
Story link: ISA increase lower than expected after budget.