ISAs: Have you made the most of your allowance?

With the end of the financial year approaching, investors have less than a week to make the most of their annual tax-efficient Individual Savings Account (ISA) allowance.

Currently, savers are able to invest up to £10,680, of which no more than £5,340 can be invested in cash, and receive any income tax free. Alternatively, the full £10,680 ISA annual limit can be invested into a stocks and shares ISA.

The deadline for the current ISA allowance is the end of the financial year on 5 April.

Figures from the Office of National Statistics (ONS) released at the end of February revealed that Britons invested more into stocks and shares ISAs (£15.837 billion) than personal pensions (£14.28 billion) in 2010/11 - the first time investment into ISA's has overtaken personal pensions since 2001/2.

Billy Mackay, marketing director of AJ Bell, said: "These figures show that pension saving had already been falling even before the Government limited the amount that can be saved into a pension from the start of the current tax year."

Economic and political uncertainties were also cited as reasons for the increased popularity of ISAs.

The ISA limit for the 2012/13 tax year beginning on 6 April will increase to £11,280, of which a maximum £5,640 can be invested in cash. The remaining £5,640 can be invested into a stocks and shares ISA with either the same or a different provider.