Know your ISA from your elbow

By Jennifer Hill

LONDON (Reuters) - Most people are unaware of changes to the individual savings account (ISA) system -- and could be missing out on this tax break.

From the start of this tax year on April 6, the ISA limits have increased, the distinction between "maxi" and "mini" ISAs scrapped and the ability to switch funds held in cash to stocks and shares-based products introduced.

But research for the Nationwide Building Society shows that three-quarters of people are unaware of the changes.

Matthew Carter, director for savings at Nationwide, says: "There are very few opportunities in this world to avoid paying tax, but saving or investing in an ISA allows you to do just that.

"ISAs really can be easy to understand and it is important that more is done to encourage people to use their yearly allowance."

Q What are the changes to ISA legislation?

A The annual allowance has increased to a total 7,200 pounds, of which up to 3,600 pounds can be saved in cash.

Personal equity plan (PEP) holdings will be reclassified as stocks and shares ISAs.