The annual contribution limit for tax-free individual savings accounts (Isas) is being increased to £10,200 to help savers hit by low interest rates. The rise in the allowance, previously £7,200, takes effect from October 6 for over-50s and from next April for younger savers.

Savers will be able to put up to £5,100 a year into a cash Isa to earn tax-free interest, with the remaining allowance available for tax-sheltered stock market investment.