The new ISA limit for over 50s is leaving the majority of eligible investors dazed and confused, research from Saga has revealed.

According to a study launched by Saga, just five per cent of over 50s know what the new ISA limits will be when they change next month, “demonstrating that the Government and the savings and investment industry need to do more to advise people of the increase,” Saga claims.

The ISA limit is increasing from its current level of £7,200 to £10,200 for over 50s on October 6, £5,100 of which can be saved in a cash ISA.

But the majority of over 50s remain unaware, as the Saga study found that more than half of over 50s have absolutely no idea that the ISA limit is changing, while a further 41 per cent know that the limit is increasing but not by how much.

Nevertheless, a savvy 39 per cent of over 50s intend to top up their ISAs following the changes.

Commenting, Andrew Goodsell, chief executive at Saga Group said: “ISAs are a vital savings vehicle, but clearly more needs to be done to ensure people make the most of the benefits available.

“We urge the over 50s to take a closer look at their savings and investments and to research the ISAs available to them, especially when the limits are increased on 6th October 2009.”

And when it comes to using the ISA wrapper, Saga found that just 38 per cent of over 50 ISA savers use their whole allowance each year. Mr Goodsell adds:

“Having access to a larger tax free savings and investment allowance will help the over 50s plan their retirement income more efficiently and we do urge people to look out for competitive rates to ensure they invest their money wisely.”

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© Fair Investment Company Ltd