Chancellor George Osborne brought good news for ISA savers in the recent Autumn Statement, announcing that the overall amount consumers can plough into their ISAs will increase from a current figure of £11,280 to £11,520 in April 2013.
ISA limits are calculated on the consumer prices index (CPI) measure of inflation in September, which stood at 2.2%, boosting the ISA limit by £240 for the 2013/14 financial year.
Junior ISA limits will also increase in April 2013, climbing from a current figure of £3,600 to £3,720.
However, there has been no change to the proportion of cash that can be held in an ISA and this will still be up to half of the total tax-free ISA amount (£5,760 in 2013/14).
The Chancellor also revealed that that the government will consult on expanding the list of investments that can be held within a stocks and shares ISA.
Savvy savers are expected to take advantage of their tax-free savings allowances ahead of the higher rate of tax threshold of £41,450 in 2013/14.
As an example, a higher-rate taxpayer with £5,000 in a savings account paying 3%, would have to hand over more than a third (£60) of the annual interest earned in tax. However, if this money had been saved in a cash ISA they would be keep the full £150.
The Centre for Policy Studies has recently championed a three-fold increase in the ISA limit to more than £30,000.
Outlining its suggestions for a reform of the annual contribution limits on ISAs and pensions, it argued that these should be combined to form a single cap of between £30,000 and £40,000.
The think tank argues that as well as increasing the scope of Isa saving this could save the Exchequer between £600 million and £1.8 billion a year, as the highest earners would receive less tax relief on large pension contributions.