Five questions about: Last-minute Isas

When is my last chance to apply for an Isa this year?

The tax year ends at midnight on Monday 5 April which means, in theory, you have up until that point to invest your Isa allowance for the 2009-10 tax year. However, this isn't necessarily the case. The deadline for Isas has been thrown into confusion because of Easter and the bank holidays. Those wanting to open a cash Isa face the biggest problems as many banks and building societies have already stopped accepting applications, although some are still taking applications in branches that are open today, or via the internet.

What about stocks and shares Isas?

Investment firms are reporting a bumper Isa season as investors seek higher returns than those offered on cash Isas – and many are still accepting applications. It will probably be cheaper to invest online via a fund supermarket or discount broker, rather than going direct to the fund management house.

Why is it important to use my allowance?

Returns on Isas are tax-free so it's well worth using as much of your annual allowance as you can afford. Research by moneysupermarket.com revealed that if a basic rate taxpayer had invested their full cash Isa allowance every year since Isas were introduced in 1999 and moved their money to the highest paying account each April, they would be £2,900 better off than if they had invested the cash in a standard savings account where the rate is taxable.

How much can I invest in an Isa?

Those under the age of 50 can invest £7,200 in an Isa. For the over 50s it is £10,200. All of it can be invested in a stocks and shares Isa. Alternatively, you can split your allowance and up to half can be put in to a cash Isa.

What are the new Isa rules?

From the next tax year, which starts on 6 April, all adults will benefit from the higher allowance currently enjoyed by the over-50s. That means you'll be able to invest £10,200 in total, of which £5,100 can go into a cash Isa. In last month's Budget, the Chancellor announced that the Isa allowance will rise in line with inflation from 2011.