ISA limit increased to £10,200

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Chancellor Alistair Darling upped the limit for Individual Savings Accounts by £3,000 from the previous value of £7,200. He also raised the amount that can be saved in cash, from £3,600 to £5,100.

The limit, brought in 10 years after the first ISAs, will come into force this year for those aged 50 or over and next year for everyone else.

Nationwide Building Society has been calling for an increase to combat the recent erosion of savings due to inflation, which has eaten into the real value of the tax-efficient allowance.

Experts also believe it will encourage prudent borrowing and boost savers' confidence.