Two fifths of over 50s are planning to take full advantage of their increased ISA allowance before the tax year ends, according to research by Saga.

As the tax year end fast approaches, 41 per cent of over 50s have shown their enthusiasm for the tax efficient investment, pledging to use their full ISA allowance before April 5, while 81 per cent of investors aged 50 or over have an ISA.

In October last year, the stocks and shares ISA allowance was increased to £10,200, while the cash ISA limit was raised to £5,100 for investors aged 50 or over. From the beginning of the 2010/11 tax year, the new limits will be rolled out to all other eligible savers.

Since the new limits were introduced, Saga has found that the vast majority of over 50s – 95 per cent – are aware of the increased ISA allowance, as more than a third has already topped up their ISAs.

However, despite the majority of over 50s being aware of their new entitlements, around half of over 50s have not topped up their ISAs as they either “didn’t have the extra money to invest” or they invested their money in other ways.

Andrew Goodsell, executive chairman of Saga, has welcomed the findings: “With low interest rates it is important that people make their money work hard for them, I am pleased to see that savvy over 50s are making the most of the increased ISA limits,” he said.

© Fair Investment Company Ltd