Savers in UK may get good news in general budget 2010. The Government has announced in today's budget that the annual Individual Savings Accounts (ISA) will increase automatically in line with inflation each year.

The ISA amount for each year is also raised from £7200 to £10200, of which £5100 can be held in cash. This means that savers can save more tax on the ISA tax saving plans.

The new ISA limit will be applicable by the beginning of the new tax year on April 6 for savers aged over 50 already benefiting. However, the rise in ISA with the inflation will be applicable by April next year.

This decision of the Government got a good response in the industry. The Chancellor announced today that the annual ISA allowance will increase from £7200 to £10200.

This is a big increase in ISA allowance amount as in the past 10 years ISA amount had been raised from £7000 to only £7200.

According to the new ISA plan, now savers can hold up to £5100 as cash ISA while earlier they could hold only £3600 in cash.

Also, they can put all ISA in stocks. Also, Alistair Darling, the Chancellor, announced that the annual allowance for ISA would rise in line with inflation by April next year.

As expected, Industry welcomed this move of the Government to raise ISA with the inflation. The IMA has welcomed the Chancellor's move to increase ISA limits in line with inflation.

IMA said it will continue to work with the Government to build on the ISA brand. ISA is considered as a popular and flexible way for people to save for both short and long-term needs.