As the ISA limit is set to be increased in October, it seems the majority of over 50s do not understand what the changes will mean to them.

According to Lloyds Banking Group, there are more than 21 million over 50s who are eligible to benefit from the new ISA limit, but 61 per cent of over 50s have confessed to not understanding the new ISA changes.

From October 6 at participating banks and building societies, anyone over 50 can invest up to £10,200 in a stocks and shares ISA, which represents a £3,000 increase on the current limit, while the cash ISA limit has been extended to £5,100.  

The October increase is not compulsory for ISA providers, but Colin Walsh, managing director of savings and investment at Lloyds Banking Group, explained why the bank is accepting the changes.
 
He said: “As the UK’s largest ISA provider, we want our customers to be able to reap the benefits of the new rules and make use of their entitlement. This historic low rate environment has meant a challenging time for savers, especially for those who rely on returns to supplement their monthly income, so maximising your full tax free allowance has never been more important.”

However, Lloyds has revealed just 15 per cent of over 50s are aware of the new limit, while four out of 10 over 50s are unaware of the changes to the ISA limit.

In addition, figures released by the Post Office indicate that many over 50s will not utilise these new ISA allowances, with only 20 per cent saying they plan to make additional contributions to their ISA, while around 10 per cent said they would make full use of the new limit.

Richard Norman, director of savings at the Post Office, urged eligible savers to consider investing more of their savings in an ISA: “At a time when savers are struggling more than ever, it is important they ensure their money is working as hard as possible for them by taking advantage of their tax free allowances.

“It is especially helpful for those approaching retirement and shows there are still rewards to be had for saving, even in the current low interest rate environment.”

From April 6 next year, the new ISA allowance will be available to all savers.

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