Firstly, the basics. The new ISA (NISA), now allows you to save up to £15,000 in each tax year, up from £11,880 previously. The qualifications are generally straightforward. You need to be a UK resident for tax purposes, 16 and over to open the cash NISA and 18 and over to open the stocks and shares NISA. The tax year runs from 6 April through to 5 April.
You can split the amount any way you like so, for example, you could have £10,000 in the cash part and the balance in the shares part or you could have £2,000 in the cash component and up to £13,000 in the shares part. Alternatively, you can use up your full allowance in cash or shares. The big difference here is that in effect, the limit for the cash part has increased from £5,940 to £15,000.
There are other changes too. In the past, you could transfer between ISA components but only in the one direction: from cash to shares whereas the new rules allow you to move in the opposite direction too and as many times as you wish. A further benefit is that these new transfer rules will apply to any existing ISA funds which you already hold. In addition, interest on cash held within the shares component , which was previously taxed at 20%, is now no longer taxable.
If you've already paid into an ISA since 6 April 2014 then your existing ISA automatically becomes a NISA and the increased £15,000 will apply, allowing you to up from the previous £11,880 limit to £15,000.
The generosity around the new increased NISA limits has also been extended, albeit to a smaller degree, towards the oft overlooked Junior ISA as the maximum investment there has been raised, post 1 July, to £4,000 per tax year.