Chancellor Alistair Darling has increased the annual ISA limit to £10,200 in his Budget, effective immediately for those aged over 50.

The new limit, of which £5,100 can be saved in cash, is to be rolled out to everyone next year.

Chancellor Darling said, ‘Tax-free ISAs have been a great success. Eighteen million people have taken them out, saving in them almost £290 billion. Since they were introduced ten years ago, the annual limit has only been increased once, and now stands at £7,200.

‘I want to go further. To help savers on the tenth anniversary of ISAs, I intend to increase the total annual limits to £10,200, of which £5,100 can be saved in cash.’