New ISA Rules Enable Over 50's To Shelter An Additional £63 Billion From The Tax Man

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8 out of 10 eligible Fidelity ISA investors* to take advantage of the most positive change to ISA savings in a decade.

Fidelity International is urging the nation's over 50's to take advantage of the most positive change to ISA savings in a decade and shelter an extra £63 billion from the tax man next month.

In the April budget, the Government introduced new ISA rules for ISAs. From October 2009, anyone aged 50 or over by 5 April 2010 will see the ISA limit increase to £10,200 - a rise of more than 40%. The new limit will be available to all investors** from the start of the new tax year.

There are approximately 21 million people aged over 50 in the UK***. Each of these people will be able to invest an extra £3,000 into a Stocks & Shares ISA or an extra £1,500 into a Cash ISA.

In a recent survey conducted by Fidelity International, 8 out of 10 eligible ISA investors* said that they will be taking advantage of the new ISA rules this tax year.

Of those looking to make the most of the tax break, the majority (77%) said they were considering investing in equities***. 35% of investors said that they were considering putting some of the additional money in a Cash ISA. Bonds, a favourite asset class among investors in late 2008 and early 2009, was the third most popular choice with only a small amount of people considering investments in property or commodities at this stage.

Ahead of the October increase, here are 5 things that eligible investors need to know:

1. The full £10,200 can be invested in a Stocks & Shares ISA or you can invest up to £5,100 in a Cash ISA and put the balance in a Stocks & Shares ISA. This is an increase of £3,000 for Stocks and Shares ISAs and £1,500 for Cash ISAs.

2. You can open one Cash ISA and one Stocks & Shares ISA in each tax year (with combined limit of £10,200). These can either be with a single ISA provider, or with 2 different ISA providers.

3. If you have already invested in an ISA this tax year, you can top it up to the new limit.

4. If you have already invested in a Stocks & Shares ISA this tax year, you don't have to invest in the same share, fund or even asset class, as long as you use the same ISA provider. For example, if in April this year you invested your ISA in a fixed income fund through a platform like Fidelity FundsNetwork™, you can put the extra £3,000 in a UK equity fund if you are feeling more confident about the market.

5. If you are unsure where to invest your ISA but don't want to lose the extra tax allowance, you could put it in an ISA Cash Park. You can then decide at a later date where to invest the money.

Rob Fisher, Head of UK Personal Investments at Fidelity International, comments: "As the credit crunch starts to ease, we are now burdened with the tax crunch. Rising taxes means every saver and investor in the country needs to optimise tax efficiency of their money now more than ever. The good news is that the Government is increasing the amount you can shelter in that most flexible product - the humble ISA - by a whopping 42%. Encouragingly, almost 80% of eligible Fidelity investors have already said that they will make use of the increased limit, but we should all be taking note and maximising our ISAs as soon as we can!"

Notes to editors:
*Source: Fidelity International survey conducted in August 2009 with 480 participants.
**Source: http://www.thisismoney.co.uk/news/article.html?in_article_id=483036&in_page_id=2
***Source : Fidelity International survey conducted in August 2009 with 480 participants.
FIL Limited ("FIL") and its subsidiary companies serve the major markets of the world by providing investment products and services to individuals and institutional investors outside the US. The value of tax savings [and eligibility to invest in an ISA] will depend on individual circumstances and all tax rules may change in the future. Cash may only be held in the stocks and share component of an ISA on a temporary basis, for the purpose of investing in qualifying investments. Interest earned will be subject to an HM Revenue and Customs charge of 20%.

For further information, please contact:
Sam Slator    
Fidelity International
01737 837 847
07841 783882

Ali Boyle
Fidelity International    
01737 837 881
07904 996086

Press office address: Fidelity International, Kingswood Place, Millfield Lane, Lower Kingswood, Tadworth, Surrey, KT20 6RP.

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