ISAs were introduced by the UK government in 1999, and provide a means for people to get a tax free return on their savings. ISA stands for Individual Savings Account.

Changes were outlined to the ISA rules in this year's budget, so it's worth summarising what those changes are. The good news is that they are mainly beneficial to consumers.

1. HIGHER YEARLY LIMITS

Up until now, savers could only put up to 3,000 per year into their Cash ISA.
They have also been able to have a Shares ISA with a yearly limit of 7,000. Also, you can choose to have a combination of a Cash ISA and a Shares ISA but the overall limit mustn't exceed 7,000 - i.e. I can put 3,000 into my Cash ISA and a further 4,000 into my Shares ISA.

The changes that are being introduced in April 2008 are as follows:

- The Cash ISA yearly limit is being increased from 3,000 to 3,600, which is excellent news!
- However, the total annual limit has just gone up from 7,000 to 7,200 ... so if you want to put the full amount into your Cash ISA, then you will have a slightly lower amount (3,600 rather than 4,000) to put into your Shares ISA.

2. AVAILABLE 'INDEFINITELY'
When the government introduced ISAs, they initially said that the scheme would only run until 2009. Thankfully, they've now changed their stance and have indicated that ISAs will remain indefinitely. Again, very good news!

3. CHILD TRUST FUNDS CAN BE ROLLED INTO AN ISA
Another bit of good news is that money invested into Child Trust Funds will be capable of being rolled straight into an ISA once the child turns 18. This will help to maximise your child's savings returns.

4. CONVERTING CASH ISAs INTO SHARES ISAs
If you've opened a Cash ISA but then decide that you want to transfer your accumulated money into a Shares ISA, then you will be able to do this. Not sure how useful this will be as most investors like to have the safety of the Cash ISA and the invest surplus funds into shares ISAs or other shares schemes. However, it is good that the flexibility will be there, I guess. It will not, however, be possible to transfer funds in the other direction, i.e. from a Shares ISA to a Cash ISA.

The changes the government are introducing are good news for savers. Existing ISA holders will be able to derive greater value. For people who don't have an ISA, it should hopefully just increase the attractiveness of them. ISAs are available from any bank or building society. You can apply for them online or alternatively via a branch. To research them, either go to a money comparison site or browse through a few bank sites. Information on them will be contained as part of the overall 'Savings' or 'Savings & Investments' parts of their sites.

Learn more about this author, Simon Wright.
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