The ISA allowance increase revealed in the Budget has been welcomed by HSBC and Lloyds.
The ISA allowance increase has been welcomed by banks.
Alistair Darling confirmed in this week's Budget that savers would be able to save a total of at least £10,200 in ISA accounts
in the next financial year.
Half of this figure - £5,100 - can be stowed away in cash ISAs
- and the announcement was commended by several banks including HSBC and Lloyds.
However, the tax-free savings allowance will now be inline with inflation and thus HSBC estimate that in 2011-12 savers will be permitted to save up to £10,400 through this method.
This predicted increase is based around an estimated inflation rate of two per cent per cent.
David Wells, HSBC head of investments, savings and pensions, said: "The increase in ISA limits
this year and over the coming years will give savers the potential to put aside a significant tax efficient nest-egg".
Previously, Clydesdale and Yorkshire Banks had warned savers not to wait until the last minute to top-up their tax-free savings for this financial year as they risk missing out because the deadline falls over the Easter weekend.
By Nate Sawyer